AAK reports 'record' Q2 profits, acquires Frita brand from Unilever

17-Jul-2014 - Last updated on 18-Jul-2014 at 12:29 GMT

Rising profitibility in chocolate and confectionery fats has bolstered Q2 results for AAK.

A 40% increase in operating profits for its chocolate and confectionery fats business unit helped AAK to 'record high' results in Q2, while the firm continues its expansion with a deal to buy Turkish oil brand Frita.

Swedish-Danish oils and fats giant AarhusKarlshamn (AAK) reported record high operating profits (excluding acquisition related costs) in its second quarter report. The firm said that volumes increased by 2%, while profits grew by 15% compared to the same quarter last year - with operating profit spiking to SEK 281 million (€30 million).

“Based on AAK’s customer value propositions for health and reduced costs, and our customer product co-development and solutions approach, we continue to remain prudently optimistic about the future," said Arne Frank, CEO and President. "The main drivers are the continued positive underlying development in Food Ingredients and the continued improvement in Chocolate & Confectionery Fats."

The oils and fats specialist also has also revealed that it has signed an agreement to acquire the Turkish frying oil brand Frita from Unilever. The firm said the deal should be seen as a natural addition to AAK Turkey’s existing product portfolio, and is an add-on to the Unipro acquisition during the third quarter of 2013.

“Frita has a very good reputation in Turkey and AAK Turkey already covers 80 percent of the Frita customers with our current bakery distribution”, said Torben Friis Lange, president Asia, CIS and Middle East. “By acquiring Frita, we will extend AAK Turkey’s product offerings.”

The firm noted that the Frita brand had approximate revenues of SEK 75 m (€8.1 m) in 2013 - adding that the overall impact of the deal on AAK’s operating profit is expected to be 'very limited.'

Second quarter breakdown

AAK saw growth in all business units in the second quarter, with results from its Chocolate & Confectionery Fats business showing the largest improvement (40%), with the business reaching an operating profit of SEK 91 m (€9.9 m).

The firms largest unit, its Food Ingredients business saw an 8% growth in operating profit - hitting SEK 198 million (€21.5 m). Its Technical Products & Feed business improved operating profit by 4% - reporting an operating profit of SEK 24 m (€2.6 m).