Raisio's Q3 back in the black

Raisio has reported a set of Q3 results that show the company's operating result is back in the black, but the full-year operating result is set to be lower than last year.

The Finnish group's turnover for the quarter was on a par with the prior year period (€113.8m compared to €110.7m). But the operating profit slipped from €3.8m last year to €2.1 this year.

Commenting on the results, CEO Rabbe Klemets said: "Third quarter operating result was back in the black thanks to the good development seen in the Ingredients and Feed businesses. The food business remained in the red, burdened by the expenses from rationalization programmes."

The company said that it expects the full-year operating result to be "clearly lower than the operating result of the previous year excluding one of items."

However, the operating result including on-off items is expected to be higher than 2005.

Turnover in full year 2005 was €424.6 million and the recorded operating result, including one-off items, was -€10.9 million.

The company's powerhouse is clearly its Benecol branded plant stanols, strong demand for which in Europe boosted overall ingredients sales from €12.3m in Q3 2005 to €12.6 this year.

"Sales of Benecol products have taken off well in Turkey, and Benecol margarine has been launched in Russia," said Klemets.

And the expansion of the company's stanol etser (Benecol) plant in Europe means that this plant now handles all European Benecol ingredients deliveries. Such a measure did mean than 15 employees at the company's US plant were made redundant.

The feed business also performed well, with turnover up from €42.9m in Q3 2005 to €45.5m this year. The company reported that fish feed exports to Russia grew steeply.

"The construction of the oat mill plant in Tatarstan and the setting up of the feed plant in Ylivieska proceed as planned," said Klemets.

However, Raisio announced that it could no longer justify the joint venture with Lannen Tehtaat for ZAO Scandic Feed after the owner of the ZAO Tosno Feed Factory withdrew from the deal.

The malt business experienced a decrease in turnover from €6.1m in Q3 2005 to €5.3m this year, due to the periodisation of deliveries. And the company expects the effects of increasing price rises in the EU as a result of malt barley shortages to impact the company next year.

The company announced restructuring measures earlier this year in order to improve performance and rationalize operations. Such initiatives were targeted at annual cost savings of €9m.