Finland's Raisio Group reported improved profitability for the first six months of 2002, although turnover for the period remained flat. Turnover for July-September however rose to €217.5 million compared to €211.5 million for the same period last year, thanks to growth in the Life Sciences unit.
Good sales in Raisio Life Sciences, the unit which makes the cholesterol-lowering ingredient Benecol, also helped improve the six-month turnover to €617.9 from €613.4 million last year. The Life Sciences unit made a profit in the third quarter after a long loss-making run. Strong growth in sales continued during the entire period.
Third-quarter operating profit for the group stood at €7.6 million up from €6.4 million in last year's third quarter. Profit before taxes totalled €3.6 a significant growth on €3.1 million in the same period last year. International turnover accounted for 52 per cent of the total turnover.
Group operating profit rose to €20 million from €14.3 million, thanks again to the better profitability of Raisio Nutrition and Raisio Life Sciences.
Raisio Life Sciences turnover grew by about 25 per cent in the January-September period, to €20.9 million. Delivery volumes of cholesterol-lowering ingredients rose by around 35 per cent, said Raisio, and of these, sales of stanol ester grew by almost 50 per cent. In the third quarter, turnover stood at €7.6 million up from €5.7 million.
The company said sales of Benecol products have risen significantly in Europe and the United States during the year. Raisio said that spreads containing the stanol ester got off to a good start in France, one of the newest markets. Products introduced by Raisio Life Sciences business sector's partners in Finland during the third quarter included Benecol butter milk and ready-made meals and Benecol milk was launched on the United Arab Emirates market.
Also, a report on the safety of sterol- and stanol-based products, which has been approved by the EU's Scientific Committee for Food, is expected to result in the grant of new permits for the end user market. The effects of the new permits are expected to be reflected in the business sector's turnover during 2003.
"The good volume and profit trend of Raisio Life Sciences is expected to continue also in the last quarter. The business sector's operating result for the whole year is expected to be much better than last year, and in the black," said the Raisio directors in a statement.They added that Raisio Group annual turnover is expected to grow moderately.
While Raisio Nutrition turnover for the six-month period remained at last year's level, operating profit increased. The transfer of Raisio Nutrition's margarine production from Sweden to Finland and Poland continued according to plan, resulting in a one-time expense of €5 million. All such production will have moved out of Sweden during the first quarter of 2003, said the company.
Group structure has been streamlined during the year by selling some sales companies and increasing group ownership in partly owned companies. Raisio Group raised its holding in the chemicals company Latexia from 50 per cent to 100.
Raisio Chemicals turnover stood at €267.7 million in the January-September period. Performance was affected by the global downward trend in the paper industry that started already last year. The market has not picked up, and consequently the demand for paper and paper chemicals has remained low.
Raisio Nutrition turnover remained close to last year's level while its operating profit rose by some 20 per cent, to €12.5 (from €10.4m) million. This was because of a change in accounting practices which boosted operating profit by €1.2 million in the January-September period, and revenues from sales of certain brands.
Raisio Nutrition turnover in the third quarter was €5.5 (4.8) million. Despite the losses in the Swedish margarine production, the profitability trend for the Foods business area has been positive, said the company.
The target of Raisio Nutrition's Foods business area is to create products that taste good and are healthy, safe and easy to use. In accordance with targets, the Foods business area introduced a Benecol rapeseed product in liquid form and oat-based Beneviva products, and expanded the range of baking products. The target is also supported by the marketing campaign 'Good food comes from the neighbourhood' launched in autumn.