According to a recent Greenyard press release, frozen activities realized solid growth despite the exceptional warm weather, but this was offset by underperforming sales in Prepared activities due to the termination of some unprofitable contracts and the ramp-up and delivery of new contracts.
While overall underlying volume demand remained stable compared to Q1 LY, a number of factors are weighing down on Greenyard’s profitability:
The recent recall of frozen products potentially contaminated with Listeria monocytogenes. Recall and related costs will negatively impact our financials for AY 2018/19, whereby we have no indications at this point in time to change our estimated amount of EUR30m (net after insurance), of which less than 20% will impact our full year REBITDA, as communicated in our press release of 17 July.
“We are executing action plans to progressively improve profitability over the course of 2018 and 2019. In addition, price increases are still possible, but are hard to estimate at this point in time. One important action plan relates to the company’s efforts to mitigate the effects of the recent recall of potentially contaminated frozen products, produced by our Hungarian facility. We are happy to announce that all tests in this facility, performed by Greenyard together with external experts and confirmed by the Hungarian authorities’ own test, had a favorable outcome,” said Greenyard’s CEO, Hein Deprez.