AAK Group’s operating profit increased by 21%, reaching SEK 664 million (EUR 63.4 million). Its food ingredients business recorded an operating profit increase of 18%, reaching SEK 369 million (EUR 35.2 million). Chocolate and confectionery fats increased by 11%, with an operating profit of SEK 258 million (EUR 24.6 million). Total volumes increased by 1%, to 575,000 MT (569,000).
Johan Westman, AAK’s president and CEO, stated: “As I write this, the war in Europe is still ongoing, directly impacting millions of people, including AAK colleagues and partners in the region. We stand with all of those impacted by this tragedy. The war has also affected the global economy, adding to already high inflationary pressures. In spite of this, we started the year on a strong note – with growth in volumes and, even more so, in operating profit, which reached an all-time high. Volumes were up 1% compared to the first quarter last year, supported by Food Ingredients and Chocolate & Confectionery Fats. Meanwhile, operating profit and operating profit per kilo grew by 15 and 13% respectively, at fixed foreign exchange rates. This is a great achievement, even more so considering the tough circumstances, made possible by our dedicated and hard-working employees around the world.”
In early March, AAK halted deliveries to and sales in Russia. The company announced, in the same statement with its financial results, its decision to wind up its operations and investments in the country. “It will be a controlled exit, carefully managing risk, safety as well as legal obligations for our employees, customers, suppliers, and our joint venture partner. AAK, which holds a 75% in this joint venture, will seek an agreement to let the business revert to our partner,” AAK said. The controlled exit is expected to result in a cost of approximately SEK 300–350 million (approximately EUR 38 million), affecting the income statement in the second quarter 2022. Russia makes up about 3% of AAK’s total volumes, measured in metric tons. Approximately half relates to Chocolate & Confectionery Fats. The company expects to limit the total impact on operating profit to approximately SEK 75–100 million (EUR 9.5 million) this year.