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Royal Greenland loss in 2008
Press release
Running in of the factory in Koszalin, rising costs for raw materials, fuel, aids ad packaging hit Royal Greenland Group profits.
Profits on our operating activities (EBIT) were DKK 50 million compared to DKK 98 million in the previous year. This includes start-up costs in Poland of DKK 46 million, losses on the purchased AGF plants of DKK 11 million and non-recurring costs in the United States of DKK 14 million.
Royal Greenland also experienced rising costs as it was not possible to raise the prices of finished goods to absorb these adverse industry conditions and exchange rate developments for the British pound and American dollar have eroded any gains.
Falling prawn and Greenland halibut volumes in Greenland, a decrease in trawler catches due to a severe winter in Greenland and a reduced share of the cod quota all affected profits in Greenland in addition to losses incurred on our takeover of the 10 AGF plants.
Financial results for the year were a loss of DKK 78 million compared to profits last year of DKK 52 million. Rising financial costs constituted DKK 14 million and earnings simultaneously fell in our associates as a result of market conditions. It should be emphasised that financial results in the financial year 2006/07 were positively affected by net earnings of DKK 87 million from the sale of assets and tax adjustments.
Throughout the year, the group has adhered to its implemented programme to create growth in EBIT profits. This was done by extensive adaptation of activities, prioritisation of investments, improvement in productivity and efficiency and cost cutting. The programme also includes the running in of our factory in Poland which after its initial phase in 2007/08 will make a positive contribution to the growth and earnings of Royal Greenland.
We anticipate that this will take place in 2008/09 if it can be supported by an improvement in the company’s overall financial situation. This includes a reduction of funds tied-up and adaptation of capacity where necessary due to falling raw materials supplies and rising cost levels.
On 9 December 2008, the Board of Directors approved the annual accounts for presentation to the Annual General Meeting in Nuuk on 27 January 2009.
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