Raisio moves to protect 2004 result

- Last updated on GMT

Related tags: Finland

Finland's Raisio Group has warned that write-downs in the fourth
quarter will impact the period's results but should help profits
for 2004.

The company said it will write down approximately €5 million of some of its property that is currently not used for production as well as €7 million in non-recurring items related to the rationalisation in Raisio Chemicals and Raisio Nutrition and closure of grain starch operations.

The group's result before taxes is expected to break even in the final quarter of 2003, with the Life Sciences' ingredient business, which makes Benecol, set to match fourth quarter profits in 2002.

Last week Raisio said it may sell the Chemicals business, outperforming the other operations this year, to allow it to focus on the core food and feed activities. Raisio Life Sciences failed to meet expected turnover in the first nine months of 2003, due to a lack of new product launches, and has swerved in and out of the red over recent years.

According to Finnish paper the Helsingin Sanomat​, the company has been forced to recognise that it does not have the strength to expand on several fronts.

Raisio Nutrition, involved in foodstuffs and animal feed production, is the traditional core of the company, but it has failed to generate significant profits in recent years. The chemicals unit is in fact the most valuable component of the group, based on its market position and the gradually improving profit performance, and some analysts have even suggested that it is worth more by itself than the entire group.

A sale would lighten Raisio's heavy debt burden giving it more space to invest in its food operations.

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