Margins improved supported by price increases
April-
- Net sales amounted to
SEK 893 million (956). Terminated distribution agreements contributed to net sales ofSEK 66 million in the comparison period. -
EBITDA, before items affecting comparability, amounted to
SEK 39 million (34), corresponding to a margin of 4.4 percent (3.6) and EBITDA amounted toSEK 25 million (28). -
The operating profit/loss, before items affecting comparability, amounted
SEK -1 million (-7), corresponding to a margin of -0.1 percent (-0.7) and the operating profit/loss amounted toSEK -15 million (-13). -
The profit/loss for the period was
SEK -32 million (-20), corresponding to earnings/loss per share ofSEK -0.22 (-0.28) before and after dilution. -
Cash flow from operating activities amounted to
SEK 17 million (54).
January-
- Net sales amounted to
SEK 1,867 million (1,928). Terminated distribution agreements contributed to net sales ofSEK 97 million in the comparison period. -
EBITDA, before items affecting comparability, amounted to
SEK 99 million (96), corresponding to a margin of 5.3 percent (5.0) and EBITDA amounted toSEK 80 million (90). -
Operating profit, before items affecting comparability, amounted to
SEK 20 million (15), corresponding to a margin of 1.1 percent (0.8) and the operating profit amounted toSEK 1 million (9). -
Profit/loss for the period was
SEK -38 million (-8), corresponding to earnings/loss per share ofSEK -0.26 (-0.11) before and after dilution. -
Cash flow from operating activities amounted to
SEK 99 million (46).
COMMENT BY THE CEO
The second quarter of the year was challenging, particularly due to weak demand in the organic products category, but also due to the weak SEK and, to some extent, NOK. Sales amounted to
The Nordics achieved good progress despite terminated distribution assignments and unfavourable exchange trends.
Diminishing market for organic food
Households' rapidly increasing living expenses have brought a temporary shift in consumers' purchasing patterns for organic products. Although we do not have any precise figures regarding market trends, they decreased in all of our geographic markets as consumers increasingly chose private label products in the lower price segment or conventional products in the health foods category. For
The gross margin improved supported by price increases
The gross margin for the quarter was significantly improved compared with the previous year. Although this is a direct effect of implemented price increases, the improvement would have been considerably greater if it weren't for negative currency effects, continued high prices for inputs and lower sales volumes.
The greatest negative impact came from the unfavourable development of SEK and NOK against EUR and USD, causing such a substantial negative effect that we are considering new price increases in certain geographic markets. Our costs for inputs also remained high. Over the quarter, prices on organic raw materials, for example, fell only marginally and not as much as one might think given the market's high inventory levels and decreased demand. Future price levels for organic raw materials will be largely determined by upcoming harvests, although it remains too early to comment on the outcome.
Continued efficiency enhancements
Our process to enhance the efficiency of the Company's and its product portfolio continues. Over the quarter, we discontinued unprofitable and under-performing brands and products, reducing complexity and, in the long run, strengthening profitability. Although the cost savings announced to date have achieved the intended effect, the weak volume trend requires that we further reduce our operating expenses.
The EBITDA, before items affecting comparability of
Despite the challenging situation, we take a confident view of the future
Despite a challenging quarter, we take a positive view of the future. It is unfortunate that organic foods, which are both healthy and sustainable, are currently declining to the benefit of less sustainable alternatives, but I am nonetheless convinced that long-term prospects remain positive. We are continuing to implement numerous measures to strengthen earnings and, on the whole, look ahead with confidence.
Peter Åsberg
President and CEO
For more information, please contact:
Peter Åsberg, CEO and President
Phone: +46 730 26 16 32
E-mail: peter.asberg@midsona.com
Max Bokander, CFO
Phone: +46 708 65 13 64
E-mail: max.bokander@midsona.com
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