Stockholm / SE. (lg) Lantmännen reported a profit of 841 million SEK (95,04 million EUR) for 2011, after net financial items and adjusted for items affecting comparability, which was slightly lower than the profit for 2010 which stood at 946 million SEK (106,9 million EUR). This weaker profit was mostly due to the unfavourable price relationship between ethanol and grain, and a fall in demand in the food sector. All figures quoted below have been adjusted for items affecting comparability.
«Although our profit is good from a historical perspective, the fluctuations in the economic cycle and the fall in demand in some of our operations are major challenges that we need to address. But our savings and action programmes are still having a good effect and our profit levels show that we have adopted the right strategy», says Per Olof Nyman, Acting Group President and CEO of Lantmännen.
The Agriculture Sector reported an operating profit of 183 million SEK (167 million SEK). This improvement was mostly due to a successful action programme, which resulted in greater efficiency, lower overheads and better deliveries to customers. The profit for cooperative operations improved, 57 million SEK (36 million SEK), which was mostly due to better production results and lower overheads, despite a slight drop in volumes.
The Machinery Sector continued to develop in a very positive way, with its operating profit rising to 444 million SEK (236 million SEK) in 2011. Both the agricultural and construction machinery operations reported good progress. Swecon Germany´s operations went according to plan and Swecon Sweden developed positively as a result of major infrastructure projects. The incoming orders for agricultural machines were on a par with the previous year and in the fourth quarter Valtra´s tractors regained their position as market leaders.
The very unfavourable price relationship between ethanol and grain continued to be a major challenge for the Energy Sector. Lantmännen Agroetanol saw a heavy loss in 2011, with the sector as a whole reporting an operating loss of 68 million SEK (compared with a profit of 125 million SEK) for the year.
A fall in demand for food, combined with the price rises that were necessary to compensate for higher commodity prices, led to lower volumes and a weaker operating profit for the food sector: 539 million SEK (784 million SEK). The start-up costs for Lantmännen Kronfagel´s plant in Valla, and delays in starting full production at Lantmännen Unibake´s plant in Bedford, England, had a negative effect on profit.
The Board has decided on a refund and a final price adjustment of one percent for agricultural products, and one percent for purchases from the Machinery Sector in Sweden, which corresponds to 110 million SEK. The proposed dividend for the annual general meeting is a five-percent dividend on capital contributions, which corresponds to 78 million SEK, and a contribution issue of 152 million SEK. In total the investment dividend and contribution issues give a return of 14,7 percent on the combined capital contributions. The Board proposes a 6,75 percent dividend on subordinated debentures.
«We will continue the work in our strategic programmes, which includes making further savings in the supply chain and reducing administration costs, as this will enable us to tackle the fluctuations in the economic cycle. We will intensify our work on demand-driven production as well. We will also ensure that we can create profitable growth in the long term by continuing to invest in our focus areas: innovation, price + mix, and leadership», said Per Olof Nyman.
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