One of Norway's biggest food firms, Tine, has reported a 2022 operating profit of NOK 1,257 million (€1.15 billion), down NOK 468 million (€42 million) on the previous year.
It said the results are characterised by a marked decline in the grocery trade as a result of society reopening after the pandemic.
The grocery market saw a volume decline of 6.3% in 2022, and Tine said it lost a percentage point as a result.
Tine said that higher spend in the hospitality sector compensated somewhat for the drop in sales in groceries.
Total sales revenues in 2022 amounted to NOK 24,866 million (€2 billion). Tine added that recent price increases it implemented across its business do not compensate for the sharp rise in costs the business has faced.
International Sales
Sales revenues at Tine International amounted to NOK 4 356 million (€3.9 billion), an increase of 15.1% from 2021. Adjusted for foreign exchange, growth stood at 8.1%.
Higher prices paid for Irish milk are reflected in the results internationally, the group said, together with sharp increases in energy and transport costs.
Operating profit slightly improved compared to 2021, but the operating margin ended at -2.7%.
"There is a significant decline in the figures we are presenting today, and despite a NOK 300 million (€27 million) in cost cuts, our margin is weakening," noted CEO Gunnar Hovland. "At the same time, employees and owners show an enormous ability to deliver despite everything that is happening around us this year."
'Sharp Cost Increases'
Looking ahead to the coming year, Hovland warned that competition policy grants needed to be allocated fairly to ensure competition on equal terms.
"We expected lower activity in groceries when the community reopened," he said. "At the same time, the entire group is hit by higher prices for many input factors, which are related to international conditions no one could foresee. We have done an invaluable job of streamlining our operations to compensate for the sharp cost increases we have throughout our value chain, from grass to glass."
"At the same time, the finances of dairy farmers are affected by the fact that some of our Norwegian competitors still receive competition policy grants, but we hope that the authorities ensure competition on equal terms in the future."
© 2023 European Supermarket Magazine – your source for the latest A-brand news. Article by Robert McHugh. Click subscribe to sign up to ESM: European Supermarket Magazine.
