Food and Beverage Business

HKScan considering selling off its Danish business

HKScan considering selling off its Danish business HKScan Food and Beverage Business

HKScan is currently considering divesting from its Denmark business, following the agreement to sell its Swedish business earlier this year. In a stock exchange statement, the Finland-based food group revealed that they are in “preliminary negotiations regarding the divestment of its Danish business.” However, they emphasized that there is “no certainty” on the outcome of the discussions or the terms of any potential transaction.

The company stated that these negotiations are part of their continued assessment of the group structure and the aim to strengthen the balance sheet. HKScan is focusing on positioning its market areas strategically as part of their long-term goal to grow into a versatile food company. At this stage, the company has declined to provide further comments on the negotiations.

HKScan currently employs approximately 677 workers across its operations in Denmark, with its primary brand being poultry producer Rose. The production units are located in Vinderup, Skovsgaard, and the head office of HKScan’s Danish operations in Aarhus.

This potential divestment decision comes after HKScan confirmed the sale of its Swedish business to local agri-food group Lantmännen for around €60m ($65.9m) earlier this year. The CEO, Juha Ruohola, explained that this divestment would enhance the company’s balance sheet and enable a sharper focus on the remaining businesses as part of the long-term strategy.

Before this, HKScan had sold off its Baltic business to Estonia’s AS Maag Grupp in August. If the company proceeds with the sale of its Danish assets, it would predominantly operate its Business Unit Finland, while its Polish unit’s performance would also be accounted for.

In 2023, the Danish business contributed €230.2m in net sales, showing an increase from €220.4m in 2022. The overall group revenue stood at €1.16bn in 2023. The comparable EBIT for HKScan reached €14.9m, equivalent to 1.3% of net sales. In Denmark, the comparable EBIT was €3.3m, amounting to 1.4% of net sales.

Despite challenges, HKScan reported its best full-year result in Denmark in over a decade. The total EBITDA for the company was €52.7m for the twelve months ending on 31 December, up from €30.1m in 2022. However, there was still a loss of €15.6m in 2023, a slight improvement from a loss of €16m in 2022.

Overall, HKScan’s potential divestment decision in Denmark reflects its strategic realignment and focus on long-term growth in the competitive food and beverage industry. By streamlining operations and enhancing financial stability, the company aims to position itself as a leading player in the evolving food and drink consumer trends.

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