Nordic drinks group Altia has reported a 5.5% sales drop for the nine months to September 2020, despite recovery during the third quarter.
During the nine-month period, Altia saw sales fall to €235.9 million (US$280.1m), a drop of €13.6m (US$16.1m) compared with 2019. In the third quarter, sales rose 2.5% to reach €86.6m (US$102.7m).
In Q3, reported earnings before interest, taxes, depreciation and amortisation (EBITDA) were worth €8.8m (US$10.4m), affected by the merger of the Koskenkorva vodka maker with Linie aquavit owner Arcus to create a new company, called Anora Group.
Earlier this year, Altia reported that net sales for the first six months of fiscal 2020 were down 9.5% due to the impact of Covid-19.
Altia CEO Pekka Tennilä said: “I am pleased to see such strong results in the third quarter with both net sales and profitability improving from last year. We have continued to manage these exceptional times very well and the strong results reflect the resilience of our business and employees.
“During the third quarter, we have seen changing Covid-19 restrictions in our home markets. Following the rising number of Covid-19 cases towards the end of the third quarter, new restrictions were imposed, and this immediately impacted us as well.
“However, we have activated our brands and we have succeeded in keeping our production running without major disruptions. Our highest priority continues to be the safety of our employees.”
Tennilä reported that volume sales in the Scandinavian monopolies have remained at a “record high level” as consumers shifted purchases from travel retail and the on-trade.
In the Finland and exports segment, Altia saw a “momentary recovery of travel retail and on-trade” in Q3.
In the Scandinavia segment, Norway continued its strong performance in both wines and spirits, while Altia gained market share in Sweden across the gin, liqueur and rum segments.
In Altia Industrial, net sales growth was driven by the sale of its Cognac inventory and the “growing but stabilising demand for ethanol during the quarter”.
‘Significant’ Covid-19 impact forecast for Q4
Tennilä added: “Towards the rest of the year, the uncertainties related to Covid-19 have escalated and the negative impacts on Altia’s last and most important quarter are expected to be substantial.
“The restrictions on social gatherings will limit the festive season and hence impact negatively the Christmas sales. Especially in Scandinavia, the sales volumes of glögg and aquavit are expected to be lower than in the previous year. Further, the significant negative impact on sales in travel retail is expected to continue.
“Despite the uncertainties in the fourth quarter, we are providing an updated guidance for 2020. Following the strong profitability development during the first nine months of the year, we expect comparable EBITDA for 2020 to be higher than in 2019.”
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Author: Owen Bellwood