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Investing.com -- AAK AB (STO:AAK) stock jumped 12% following the company’s second quarter results that showed a 16% increase in operating profit despite a slight decline in volumes.
The Swedish specialty oils and fats producer reported operating profit growth of 16% in the quarter, excluding items affecting comparability, the Hillside divestment, and currency effects. This performance came despite a 2% decline in volumes to 490,000 MT compared to 498,000 MT in the same period last year, when excluding the effect of the Hillside divestment.
"In the second quarter, we continued to successfully execute on our strategic priorities: improving our product mix, driving operational efficiency and productivity across the organization, despite a continued dynamic global environment," said Johan Westman, President and CEO of AAK.
Profit for the period totaled SEK 851 million ($80.5 million) compared to SEK 809 million in the year-ago quarter, excluding items affecting comparability. Earnings per share reached SEK 3.26 versus SEK 3.11 in the same period last year.
The company recognized a one-time restructuring cost of SEK 250 million as an item affecting comparability related to its cost performance program called "Fit-to-Win."
By business segment, Food Ingredients saw operating profit increase by 4% to SEK 764 million, excluding the Hillside divestment. Chocolate & Confectionery Fats also reported a 4% rise in operating profit to SEK 450 million, while Technical Products & Feed showed the strongest improvement with operating profit surging 178% to SEK 25 million.
Cash flow from operating activities amounted to SEK 524 million, down from SEK 1,002 million in the comparable quarter. Return on Capital Employed (ROCE) for the trailing twelve months was 21.9%.
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