Lower Result for Royal Cosun ‘Better than Expected’
Breda, Holland-headquartered Royal Cosun, parent company of frozen potato specialist Aviko, achieved lower annual sales figures in 2015 than in 2014, but it was still better than expected. The decline can basically be attributed to considerably lower sales prices of sugar in the European Union, as sugar beets fetched only €43.01 per ton on average, compared to €50.18 in 2014. The performance of other activities further increased last year.
Consolidated turnover amounted to €2 billion, versus 2014 sales of €2.1 billion. The operating result dropped to €59 million (2014: €110 million). Net profit is projected at €46 million, down considerably from €79 million in 2014.
The turnover of Suiker Unie declined significantly as a result of historically low sugar prices within the EU. Thanks to cost control measures and market position, the company managed to realize a considerably lower but relatively good result. Its Dutch sugar factories and facility in Anklam, Germany, performed well during the entire campaign.
Aviko Sales Rise
Steenderen, Holland-headquartered Aviko was able to further improve its performance 2015, also thanks to higher sales at good prices. The sales of potato specialties and french fries increased, due in part to more export to Asia. As a result of margin pressure in the Chinese market, however, granulate and flake activity value slightly lagged behind that of the previous year.
Last month, Aviko announced that it would eliminate 75 jobs from its workforce of approximately 1,700 people. The redundancies will mainly be in middle management positions, and it is expected that 55 jobs will be cut in Holland and the rest elsewhere in Europe.
"There will be 25 layoffs, but since these will be spread out over all of Europe, the number of layoffs in Steenderen will be limited,” said Aviko CEO Hein Merckens. "The other positions will be eliminated as a result of retirements, and by not renewing temporary contracts."
Merckens continued: "We want to strengthen our position in Europe and Asia. In order to be competitive, we have to improve our cost structure. We have had two good years of growth, but our ambition is to accelerate growth even more."
Performances Among Other Units
Sensus showed a lower result than in 2014, when it took advantage of one-off revenue. The sales of inulin increased, but due to increasing competition prices were under pressure. The 2015 chicory campaign went well, the quality of the produced inulin remained stable during the entire campaign.
SVZ booked nearly the same result as in 2014. In Europe better better fugures were realized, and in the US slightly worse results were recorded. The demand for fruit juices decreased somewhat, while demand for vegetable-based juices actually increased.
One of the SVZ factories in Poland was closed, with part of the production at the site relocated at a nearby plant in Tómaszow.
Duynie did well right down the line. A better margin was realized with a lower volume. The sales to biomass digesters increased and the starch activity was also on the rise. The integration of earlier acquisitions and streamlining of the support departments again contributed to a further reduction of the costs.
Royal Consun President & CEO Robert Smith commented: “In a year like 2015 we were, with our five activities, able to properly deal with the volatility in the various markets. As intended, we thus created a solid foundation for our result. This way we created a stable basis for the group and for the beet price after 2017.”