Higher raw material prices see AAK's profits climb
The manufacturer reports a hike in half-year profits after higher raw material prices and a “better product mix” pushed sales higher for a record Q2. The company also notes its net profit for the first six months was up 19 per cent at SEK 265m (€28.6m).
Its net sales in the second quarter rose to SEK 3.9bn - slightly above analysts’ expectations. Operating profit for the same period, reached SEK 196m, an improvement of 20 per cent, notes AAK.
In the largest business area, food ingredients, operating profit reached SEK 120m, an improvement of 19 per cent.
AAK said its bakery division is developing ‘very nicely’.
The acquisition of leading US flaked shortening manufacturer, Golden Foods/Golden Brands, announced at the beginning of July, will provide a “large commercial advantage” to the supplier in North America, in that it gives AAK two production sites there.
Three weeks into integration, said the Swedish supplier, the merger is progressing well from both the perspective of customers and employees.
Volume growth in AAK’s chocolate and confectionery fats (CCF) division was reported at 7 per cent. This division is developing well in the North, Central, and South American markets but remains stable in Western Europe, said the Swedish group. Furthermore, there are “no signs” of a fast recovery in Eastern European countries.
The company said it is starting to focus on developing the CCF ingredients in Asia.
And it stressed that the impact of low cocoa butter prices on its CCF division has been negligible.
Progress and organic growth will emanate from additional mergers and acquisitions as well as continued investment in speciality products, said the company. It expressed cautious optimism for the third and fourth quarters.
