Lantmännen’s result in line with the previous year – future effects of the summer’s drought difficult to fully predict
Lantmännen’s result for the first eight months of 2018, after net financial items and adjusted for items affecting comparability, amounts to 1 058 MSEK – compared to last year’s result of 1 112 MSEK.
”Lantmännen as a whole continues to develop well, although the second four-month period has obviously been dominated by the dry and warm summer, which has had a major impact both on our own operations and on our owners’ farms. Comprehensive measures have been taken to handle the extreme weather; for example, Lantmännen has introduced an action package for our members, to mitigate the effects of the summer’s weather,” says Per Olof Nyman, Lantmännen’s CEO and Group President.
The figures below refer to operating profit, adjusted for items affecting comparability, for the period of January-August, 2018. Last year’s result in parentheses.
The Agriculture Sector shows a lower result than the previous year: 226 MSEK (266 MSEK), which is entirely due to this year’s low grain harvest. The effects of the drought and heat place great demands on the sector’s ability to supply the industrial operations with grain, and the demand for feed and seed has been very high during the summer.
The Energy Sector’s result is lower than last year: 152 MSEK (252 MSEK), which is mainly due to a lower ethanol price compared to 2017. The drought and heat has also affected sales of alkylate petrol negatively. In August, it was announced that Lantmännen Reppe, due to lack of profitability, intends to discontinue its production of glucose syrup in Växjö, Sweden.
The Food Sector shows a result that is higher than the previous year: 556 MSEK (504 MSEK). Lantmännen Cerealia has continued its development from the first four-month period, and shows a higher result than last year – primarily thanks to continued improvement work and cost cutting. Lantmännen Unibake continues to develop in a stable manner, and shows a result on a level with last year.
Business Area Swecon shows a result that is higher than last year: 219 MSEK (204 MSEK). The business area continues to develop positively, and the situation on Swecon’s markets is generally good: sales in Sweden are in line with last year’s record levels, and Swecon has taken market shares on the growing German market.
Business Area Real Estate is developing according to plan, with a result, excluding capital gains, that is on a level with the previous year: 140 MSEK (139 MSEK).
The dry and warm summer, which has led to low harvests and feed shortage, brings challenges both for Lantmännen and for Lantmännen’s owners. To mitigate the near-term effects of the drought, Lantmännen has introduced an action package of some 220 MSEK. As part of the package, 146 MSEK has been paid at the end of September to Lantmännen’s owners in the form of extra refunds and supplementary payments. This means that Lantmännen has paid out more than 700 MSEK in total dividend during 2018.
“One of our cooperative’s greatest strengths is that we can act on short notice to support our members. Our balanced business portfolio also means that we can compensate for temporary setbacks in certain areas with good results in other businesses, which brings with it a stability that is important both for owners, customers, business partners, and employees. I’m proud to be part of Lantmännen, and I have strong confidence that we can both meet the challenges we now face – and eventually shift our focus back to the ambitious plan we have for profitable growth,” says Per Olof Nyman.
The interim report is available at https://lantmannen.com/en/financialinformation.
Images are available at https://lantmannen.com/en/press-and-publications/press-images/.
If you have any questions, please contact:
Per Olof Nyman, CEO and Group President, Lantmännen
Phone: +46 706 57 42 47
E-mail: per.olof.nyman@lantmannen.com
Ulf Zenk, CFO, Lantmännen
Phone: +46 725 61 15 63
E-mail: ulf.zenk@lantmannen.com
Lantmännen’s press office
Phone: +46 10 556 88 00
E-mail: press@lantmannen.com
This information is information that Lantmännen ek för is required to disclose under the EU Market Abuse Regulation. The information was submitted by the above contact persons for publication at 08.00 CET on October 4, 2018.
About Lantmännen
Lantmännen is an agricultural cooperative and Northern Europe’s leader in agriculture, machinery, bioenergy and food products. Owned by 25,000 Swedish farmers, we have 10,000 employees, operations in over 20 countries and an annual turnover of EUR 4 billion (SEK 40 billion). With grain at the heart of our operations, we refine arable land resources to make farming thrive. Some of our best-known food brands are AXA, Bonjour, Kungsörnen, GoGreen, Gooh, FINN CRISP, Schulstad and Vaasan. Our company is founded on the knowledge and values acquired through generations of farmers. With research, development and operations throughout the value chain, together we take responsibility from field to fork. For more information: lantmannen.com/en.
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