Warsaw (Puls Biznesu) - Meat producer Duda's report shows that the sector is in trouble. Lower revenue against higher sales – this is the situation of the meat giant reflecting the situation of the whole sector. Low market prices for pork and strong zloty are to be blamed, Maciej Duda, the company’s CEO, explains. He promises better future performance, but not before the end of 2008.
After Poland’s EU accession, sales and income of Polish food producers, jumped. This year, however, Polish food producers have to struggle with price fluctuations. PKM Duda disappointed investors with its third quarter results. The stock price dived 6.3 percent to PLN 7.4 (EUR 2). The net income was nearly twice smaller than last year and it was despite much higher sales.“The recent months have been extremely difficult for our sector. Low pork prices in the EU along with strong zloty made it unprofitable to export and resulted in meat surplus in Poland”, Maciej Duda, PKM Duda CEO said. He added that the Russian embargo for Polish meat and closed Belarusian market make the situation even more difficult. “In this situation, we believe to be very successful to have increased sales to record high”, Maciej Duda added. Experts believe that tough situation on the market will continue. Witold Choinski, CEO of Polskie Mieso association, said that EU could provide meat producers with surcharges to exports. In his opinion, the situation of Polish companies will largely depend on retailers who increased imports of cheap meat from Western Europe. Duda management, however, believes next year’s results will be better.“In 2008, the pork surplus will disappear because many farmers withdraw from breeding. Prices will grow, especially in the third and fourth quarter”, Maciej Duda added. He hopes that his company will then make up for the present losses. It will be well prepared as it keeps investing in breeding now. PKM Duda will also consolidate results of its Ukrainian subsidiary. Within three years, the group will have over PLN 2bn of sales. (PLN 1 = EUR 0.274)