Devro lowers annual profit forecast
Sausage casing supplier Devro said its full-year operating profit would be around 3% down on expectations due to currency fluctuations, inflation in hide costs and delays to capacity expansion projects.
In an interim management statement, covering the third quarter from 1 July to 22 October 2012, the company said sales volumes had continued to grow in Japan, Europe and the Americas, with sales of its premium Select range continuing the momentum of the first half.
“Overall market demand remains strong both in established and emerging markets,” said Devro. “In common with many input costs to the food industry, raw material prices have continued to rise and this trend is expected into next year. As a result of the combination of adverse currency movements, continuing increases in raw material costs and extended plant commissioning periods, overall full year operating profits are expected to be slightly below our original expectations but ahead of last year.”
The 2012 capital programme involves an investment of approximately £35m to increase capacity and enhance productivity in 2013 and 2014. New lines are now running successfully in Scotland, Australia, the USA and Czech Republic. Further capacity is on track for completion in 2013. With new capacity in production and a full order book, the group said it was looking at a strong end to the year and that the board remained confident in the continuing growth of the business.
Peter Page, CEO, commented: “Our business is well-positioned for the future, with good demand from a global customer base, an experienced management team and a proven product portfolio.”
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- interim management statement
- expansion projects
- currency fluctuations
- fluctuations inflation
- hide costs
- capacity expansion
- management statement covering
- capacity expansion projects
- year operating profit
- currency fluctuations inflation
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