AS Maag Grupp acquires Pouttu

Private equity firm Sponsor Capital and minority owners have decided to sell Finnish meat foods manufacturer Pouttu to Estonian food production company Maag Grupp. Maag has been eyeing the Finnish market for quite some time and perhaps the recent developments and news in the sector tipped the scales towards a sale. Pouttu has around 200 employees in Finland, who will continue at their post.

Another Finnish meat house HKScan (OMXH: HKSAV) announced it is cutting 123 jobs, 49 through”permanent layoffs” upon the conclusion of the statutory labour negotiations. The remainder of reductions are handled via pension schemes and lessened working hours. HK Scan says it targets a five million profit improvement.

HKScan tweaks organization in Finland

HK Scan (OMXH: HKSAV) is merging its wholly owned subsidiaries meat processer Järvi-Suomen Portti Oy, and slaughterhouse Helanderin Teurastamo Oy into HK Ruokatalo Oy, the arm responsible for the group’s industrial operations, sales, marketing, logistics and transportation in Finland, which continues as a fully owned subsidiary. HKScan promises that employees will move into the new company with existing benefits intact. The stock has recovered somewhat in the last two weeks as food processing companies have been pooled in as quality stocks despite individual differences.

HKScan warns losses in Sweden push result to minus

HKScan (OMXH: HKSAV) warned that its Swedish operations have been loss-making to start the year. The company blames higher than expected purchasing price and weaker availability of pork and beef meat. The production of pig and cow meat in Sweden has continued to slide, leaving slaughtering volumes and margins low. The company also blames strong krona, which has increased imports.

The Finland-based manufacturer of meat foods and products entered Sweden in 2007 through a purchase of Scan AB. It says that the loss in Sweden will also push the group result for Q1 to a small minus despite improving operations in Finland.

The company does maintain 2012 expectations of improved result compared to 2011 despite this weaker than expected outcome. The firm starts an efficiency programme lasting until the end of 2013 aiming to reach over 20 million Euro result improvement. HKScan said it is looking at longer-term measures in Sweden. The stock has slid over 6% in the 10 minutes following the warning.

HKScan profit warning

In a widely anticipated move, meat foods manufacturer HkScan (OMX: HKSAV) had to warn that its 2011 EBIT will not reach 2010 levels. Previously the company had been saying that EBIT is expected to improve. HKScan blames continuing weakness in international pork market (pork is oversupplied in Europe) and high input prices for the development.