Waarschoot, 12 Nov, 2008 - Ter Beke has posted its trading update for the first nine months of the year.
Main events in the third quarter of 2008
Ready Meals Division:
In July 2008, the earlier announced reorganisation of the French commercial and administrative organisation and of the production structures at the Alby-sur-Chéran (France) site, was achieved within the provided budget of 1,1 million EUR. A non current provision was set up in this respect in 2007. This reorganisation was necessary in order to adapt the French organisation to the effects of the re-negotiation and termination by the group of a number of high volume contracts in the French market. This reorganisation should allow Ter Beke to further restore the profitability of its French operations.
Processed Meats division:
In the beginning of April 2008, the group decided to transfer the production of poultry products, and the employment in relation thereto, from the Ruiselede site to the Waarschoot site. This decision was taken because the existing facilities and capacity in Ruiselede were insufficient to address the growth in poultry products. This transfer has been completed within the provided timing and within the provided budget of 3 million EUR.
Activities and results evolution
The group's turnover in the first nine months of 2008 is 7,4% higher than the turnover in the same period of 2008. This is primarily due to the inclusion of the results of the Dutch company Berkhout Verssnijlijn in the consolidated results. Berkhout was taken over in September 2007.
On a like for like basis, the group's turnover decreased slightly in the first nine months of 2008. The reasons for this were already presented at the publication of the half year results. In the third quarter, sales in the summer months July and August were below expectations. In September, sales went up again, both in the processed meats and the ready meals division.
The considerable increase of raw materials continued to put pressure on the margins in the third quarter, primarily in the processed meats division. In the first nine months of 2008 the group was unable to charge more than EUR 2 million in raw material prices in the sales prices, which made certain cost measures inevitable.
Prospects for 2008
If sales in the last quarter of 2008 are in line with previous years and unless the market environment significantly deteriorates, the group expects that the result for the full year 2008 will exceed the result of 2007.