Lantmännen Group: Q2/2010 was a strong quarter

Stockholm / SE. (lg) Lantmännen Group´s profit for the second quarter amounted to 286 million Swedish Crowns (SEK) after net financial items and adjusted for items affecting comparability, compared with a loss of 43 million SEK in the previous year; this represents an improvement of 329 million SEK. Lantmännen´s cash flow from operating activities continued to be strong, amounting to 544 million SEK before financing activities. The results are in line with the company´s plans, but the pattern differs slightly from the previous quarter. Both Lantmännen Agriculture´s cooperative business and the Machinery sector showed significant improvements in their results. All figures quoted below are operating results adjusted for items affecting comparability.

«It is the work we have carried out on supply chain savings and our major restructuring project that has mainly helped us to achieve these results. We are still not in a position to talk about a significant increase in growth – we have only seen a weak increase in demand, mainly in our Machinery sector», says Per Strömberg, Group President and CEO.

The Agriculture sector´s cooperative activities reported a profit of seven million SEK (compared to a loss of 142 million SEK). These results are mainly driven by strong cost savings and rationalization work. Last year´s result includes a cost of 90 million SEK related to downgrading grain and writing down fertilizer in 2009. Positive contributions to the quarter´s results also include strong sales of fertilizer and different kinds of seed. The loss for the whole Agriculture sector amounted to six million SEK (compared to a loss of 154 million SEK). Lantmännen SW Seed reported somewhat worse results in this quarter, while international activities exceeded last year´s figures.

The Machinery sector reported a strong profit for the quarter of 124 million SEK (31 million SEK). This positive result is due to the savings program having an effect, the after-market for machines continuing to be good and an improvement in demand. The Energy sector reported weak results, a loss of three million SEK (two million SEK). This is due to low ethanol prices and a stronger Swedish Crown. The Food sector reported a stable profit of 223 million SEK (224 million SEK). Consumers continued to increase their consumption of chicken and Kronfågel´s offering to the market is attractive, resulting in higher market shares. Lantmännen Cerealia´s profit fell due to the business-to-business flour in Denmark showing a decline in the total market with lower volumes and squeezed margins.

In the second quarter Lantmännen Agriculture opened a new feed plant in Lidköping. Lantmännen Unibake invested in a fastfood bakery in Hungary, which strengthens our position on the Central European market, and it took over all the shares in Bakehouse in the United Kingdom.

«Lantmännen has taken some decisive action, which will now pay off. We will continue to work to improve our results even further and to be competitive, particularly in Lantmännen Agriculture´s cooperative activities», concludes Per Strömberg, Group President and CEO.