Profits surge at Raisio on chemicals sale

The sale of Raisio's chemicals business has had a major benefit on the firm's first half profits but new functional food launches and sales of the Finnish company's cholesterol-lowering ingredient also lifted earnings for continuing activities.

Raisio included a €228.9 million sales figure in its turnover for the first half, thanks to the divestment of the chemicals business -its most profitable - during May. The sale has also allowed the company to write off its debt and given it new leverage for expansion into the health foods market.

But excluding this one-off item, which swelled first half operating profits to €196 million compared to -€10.4 million the prior year, a 65 per cent increase in phytosterol sales during the second quarter helped generate €4.4 million in profits from continuing activities, and €5.5 million for the six-month period.

The Ingredients business boosted sales in Europe especially, with new launches including a yoghurt drink in France and yoghurt and milk in Portugal. The division, which also includes a diagnostics business, posted a profit of €1.4 million during the six months, excluding one-off items such as goodwill from the recently acquired Diffchamb.

The unit has been targeted for annual growth of between 15-20 per cent although it is expected to see slower growth in the second half.

Sales at the Nutrition unit, which makes margarine and animal feed ingredients, continued as before with a small decline in sales and cost-saving measures impacting operating profits for the period. Turnover fell 3 per cent but operating result, excluding one-off items relating to restructuring, improved to €1.8 million from -€2.4 million the prior year.

Raisio is hoping to improve performance in this unit by maximising its position in eastern European markets. It has also been targeted to play a bigger role in development of health foods, to support the group's new strategy.