Atria’s Q4-2013 - passable or even satisfactory results far and near

Atria Group’s Q4 result is not especially thrilling but it’s still quite fine.  It does not happen often that Atria Group makes profit in every market area (non-recurrent items excluded). However, improvements seem to be mostly due to spending cuts only.  Unfortunately the Financial Statement Report is rather concise and does not tell at all for instance about how the new products sell in Russia.

Atria Finland’s sales improved, compared to Q4-2012, but not quite to the same extent as during Q2 and Q3 periods.  Severe price competition - Atria likely itself the principal troublemaker - led to low average profits.

More interesting is happening this year. In January the corporate deal by Atria and Saarioinen was approved by Finnish Competition and Consumer Authority FCCA.  However, based on the FCCA’s press release, one might conclude that things have not quite gone Atria’s way.

Here’s a direct quote:

“In the procurement of animals for slaughter, a significant part of Saarioinen's meat producers have become, or are in the process of becoming producers of Atria's competitors. Consequently, Atria's position on the procurement market is not strengthened by the same amount as the market position of the target of the deal. Even after the transaction, companies on the procurement market include, in addition to Atria, HKScan, as well as Oy Snellman Ab, which has been considerably strengthened by the the meat producers that have joined it after leaving Saarioinen. Producers will continue to have the possibility to select their trading partners from among different meat producers.”

And here’s another direct quote:

“In the wholesale market for fresh chicken, a new player, Huttulan Kukko, is starting. The slaughter capacity of Huttulan Kukko and the meat volumes that the company is bringing to the market are very close to the capacity and volume of the target of the deal, which reduces, for its part, the market impact caused by the corporate transaction. In addition, HKScan will remain the largest player on the chicken market even after the deal.”

The release is from 2014-01-23 and it also says the following:  “A public version of the decision will be published on the FCAA website in about two weeks.” Unfortunately I haven’t found it yet.

Atria Scandinavia’s Q4 was very good indeed.  In the Financial Statement Release especially food service and fast food are praised.  Sibylla Sweden at least makes progress. The company aims to increase its current turnover, roughly €80 million, to €100 million. New restaurants are set up in emerging locations.  Efforts are made to ease franchising entrepreneurs’ early stages with the company.  Sibylla’s image will be improved and integrated.  Lycka till!

The Group gives so scantly info about the success of Atria Russia’s new product line but Sibylla Russia at least seems to be expanding from gas stations and sports arenas to streets and the Swedish origin surely is not hided.  

The most important news - which again makes Russia a story of its own - is of course that Russia has banned EU pork due to ASF outbreak in Lithuania.  However, fresh news on Rosselkhotsnadsor’s site seems to indicate that the ban could be terminated if the safety of products is ensured more accurately.  Thus, it might be expected that the ban does not distort the pork market in the EU.

Atria Baltic is narrowly in profit but the primary production may face serious difficulties.  Namely, whether or not Russia’s ban is terminated, the ASF keeps going in Lithuania and could easily spread to the whole Baltics. Estonia has a strong wild boar population and the concern is already brought to public.

We will discuss Atria later but on Friday, February 28^th, we are going to look at HKScan’s businesses.  Become a guru!  Listen How to Write a Haiku.

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