Atria: Solid Q1 despite ramp-up of the new poultry unit - Nordea

Atria reported Q1 adjusted EBIT of EUR 8.0m, 114% (EUR 4.3m) above LSEG Data & Analytics consensus. Q1 net sales of EUR 417m were down 3% y/y and came 1% above consensus. Q1 EBIT beat to our estimates came from all divisions. In Finland, sales declined due to lower feed sales prices and sluggish export and foodservice sales, while the company notes oversupply of red meat in the market. New poultry unit ramp-up burdened profitability. Sweden profitability turned positive driven by centralisation of production last year. Fierce price competition in Denmark has continue, while the company was able to improve EBIT owing to efficiency improvement programme. Operating cash flow was EUR -17m (EUR -13m a year ago). Atria reiterated its guidance which expects decline in adjusted EBIT in 2024 (after EUR 49.6m in 2023). Consensus has modelled EUR 48.3m, or 3% decline. Atria expects challenging operating environment to continue in 2024. We view reiterated guidance as conservative, especially after Q1 EBIT beat as the company should benefit clearly from ramp-up of the new poultry unit and closure of Sahalahti plant in H2. However, due to reiterated guidance, we expect consensus to make only minor revisions.