announces profits dip
KVERNELANDs profit before tax is down by some 29% for the second four-month period of the companys fiscal year – despite a 2.2% increase in sales turnover.
The reduction in profit is related to individual areas, says Kverneland. In particular, potato machinery has turned in an operating loss. Introduction of a new harvester may have been successful technically but poor market conditions resulted in inadequate sales volumes.
Problems have been further compounded through development delays which added high costs to the machine and hampered large scale production.
The other main problem says Kverneland in a statement from the board, lies in the performance of Devizes-based Kverneland-Kidd, which is reported to be "having problems integrating production of harrows". Manufacture was transferred from Norway last year.
Kverneland, like most other manufacturing companies, recognises there are tough times ahead due to the reduction in the total market and lower farm incomes.
A necessary change process will be initiated, it says, to enable the group to cope with the change in marketing conditions throughout western Europe. Growth in new markets will now have a central role.n