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Cosun doubles net profit in 2002

8 April 2003

Royal Cosun, a manufacturer of natural foodstuffs and food ingredients, realised a net profit of EUR 39 million in 2002, an increase of 112% in comparison with 2001. Consolidated turnover increased by 13% to EUR 1,104 million (2001: EUR 979 million). Of the increase 12% was attributable to the acquisition of Aviko, in which Cosun already had a 30% interest. Operating profit was 38% lower at EUR 48 million (2001: EUR 79 million).

 

The basic ingredients group as a whole realised lower results than in 2001. Suiker Unie benefited from a good campaign thanks to favourable weather conditions during the harvest and a further improvement in production efficiency. On the other hand, a cut in the European sugar quota in combination with an additional levy over 2001 of 8.3% had a significant negative financial impact. Sensus had a difficult year, mainly because of the limited harvest in 2001. Sales of inulin were again higher. Nedalco’s results were restrained by low market prices.


In the course of 2002, Cosun acquired full ownership of the potato specialities manufacturer, Aviko, one of the leading players in the European market. Aviko concentrates on the foodservice and consumer markets and takes second place in the European potato products market. Cosun has definitely strengthened itself with Aviko. In line with expectation, the company’s operational performance was considerably better than in 2001, chiefly because of the disposal of loss-making activities in North America.


The compound ingredients group improved its operational performance but the progress has still not adequately fed through into the financial result. For Unifine Döhler, 2002 was a successful year. The transfer of third-party activities to a Unifine Döhler factory caused some delays, but the company as a whole is now better structured. The companies acquired in 2001 were integrated quickly and efficiently. Unifine, by contrast, had a difficult year in 2002, chiefly because of setbacks in the construction of a new factory in Nijkerk. The North American and industrial activities performed well. SVZ can look back on a good operational year with favourable results on both its fruit and vegetable activities.


Cosun’s participating interest, Advanta, reported a strong improvement on the disappointing results of previous years and returned to profit. Both Cosun and its fellow shareholder intend to dispose of this participating interest.


Prospects
Cosun worked on the further streamlining of its organisation and increasing its efficiency in 2002. The basic ingredients group concentrated chiefly on maintaining its profitability, whereas Aviko and the compound ingredients group have the turnover and profit potential to generate the revenues the cooperation’s members are entitled to expect.


The results of the basic ingredients group will be lower in 2003 than in the past year, partly because of organic cost rises at Suiker Unie and persistent pressure on the European sugar market. Nedalco’s results will be modest because of low alcohol prices. Sensus will recover from its difficult year in 2002 thanks in part to the further growth of inulin sales.
Margins on potato products are under pressure but Aviko is expected to partly offset the negative effects by means of cost savings and an increase in turnover and market share.
In the compound ingredients group, turnover and results are projected to increase. Unifine Döhler will benefit from the integration and restructuring measures that were completed in 2002. Unifine expects to continue its good results in North America and in the industrial ingredients sector. In the foodservice market, Unifine is looking forward to a recovery following the near completion of the construction work in 2002. Advanta is expected to turn in a good result for 2003 but its contribution to Cosun’s profit for the year will be determined largely by the progress made with its sale.


Excluding the result of participating interests (principally Advanta) and extraordinary income and expense, the net profit for 2003 will be comparable to that for 2002, with Aviko and the compound ingredients group compensating for lower results at the basic ingredients group.