France’s second-largest meat processor Elivia, a joint venture between Dawn Meats and the French co-op Terrena, has reported a 30% increase in sales for its 2016 financial year to just under €1bn. The significant increase in sales is a result of further corporate streamlining by the French processor, with seven subsidiaries merged into direct ownership last year.

This brings the total number of processing facilities operated by Elivia across Northern France to 16 and helped the processor’s cattle kill for 2016 increase by 1% to more than 430,000 head.

More importantly, the business recorded a significant improvement in profitability in 2016 despite continued investment. For the 12 months to the end of December, Elivia reported earnings (EBITDA) of €15.3m, which is almost double last year’s earnings of just over €8m. However, Elivia continues to operate off very tight earnings margins of just 1.6% despite the improved performance last year.

Operating profit

After racking up losses close to €700,000 in 2015, Elivia returned to the black for its 2016 financial year, with operating profits improving to €655,000. This leaves the business working off a razor-thin profit margin of less than 0.1%.

The consolidation of profits from subsidiary businesses yielded more than €11m in financial inflows, which accounted for the increase in pre-tax profit to €12m, up from just €1m a year earlier. The addition of these subsidiaries into the overall business saw staff numbers grow from 1,933 to 2,113, with another 553 employees of associated companies now working for the parent business.

The annual accounts filed by Elivia show a €7m increase in the value of its buildings and a €19m rise in the value of equipment, which reflects the three-year investment programme agreed with Dawn Meats when the Irish company took its 49% stake in the company in 2015.

Modernising

Elivia has also been expanding capacity at several factories and modernising its processing and IT infrastructure. The company reports receiving just under €1m in investment subsidies from the French government attributable to last year, and another €500,000 in operating subsidies. Elivia’s overall net debt position at year end increased moderately by €10m to €175m.

Dawn’s stake in Elivia remained 49% at the end of 2016. The agreement signed with Terrena in 2014 offers the Irish partner an option to increase its shareholding to a maximum of 70% by 2019.

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