Avebe 'on track' with solid year results
2005/2006 marks the completion of what the firm calls its
'reconstruction phase'.
The result includes a one-off charge of €12.7 million for additional redundancy packages both at home and abroad.
"Leaving aside that charge, the net positive operating result totals €7.5 million," said the firm in a statement.
"That represents an increase of €1.8 million on the previous year."
According to chairman of the board Okke Koo, the improved result can be attributed to the successful implementation of the firm's reconstruction.
"We are approaching the turning point and are ready to enter a new phase," said Koo.
"The emphasis in that phase will be placed on tapping new sources for growth in profit.The reconstruction phase is now as good as completed, and Avebe is set for renewed growth in profit."
Avebe has consciously been focusing on its core business, potato starch. Waxy potato starch sales alone, which have a higher added value, have quadrupled compared with 2004/2005, and the firm has also opened a new dextrin plant in Ter Apelkanaal.
There has also been a reduction of the Dutch organisation by more than 300 staff to 1,068. The organisation outside of the Netherlands has also been reduced from 900 to 550.
In addition, the company has carried through the disinvestment of non-core activities outside of Europe, such as the sale of the interest in tapioca starch in Thailand and the sale of production companies in Brazil and China, though part of this deal remains subject to approval from the Chinese government.
The annual report which has yet to be adopted by the Members Council shows a net operational cash flow (before financing activities) of €35.8 million, representing a improvement in relation to the previous two years, when the cash flow was negative.
"The groups balance sheet position has thus substantially improved during the past year, with the interest bearing debt being reduced by €33.6 million," said the firm.
"Staffing levels will however be reduced through natural wastage. Despite the poor potato harvest in the current financial year, Avebe is confident that the under capacity will be largely offset by further cost savings and by developments on the market."
