Marel set for job cuts after profits warning

Despite a record high order book, international food processing equipment company Marel issued a profits warning yesterday.

The Iceland-based business has also warned that global staff numbers will be cut by around 5%.

The downturn follows years of impressive growth for Marel, which is particularly strong in seafood processing. The company said its operating profit or EBIT for the quarter is below expectations with a margin of 6.3%, almost half of that for 2021.

Marel said the acquisition of Wenger, a leader in aqua feed and pet food solutions in April, has had a positive effect on operating results.

But it adds: “In light of the continuing challenges related to the supply chain and high inflation, which led to slower than expected revenue growth, Marel will take immediate action to improve its operating results and support its financial targets by the end of 2023.

“In order to reduce costs, the difficult decision has been made to reduce the company’s employees by 5% worldwide.

“It is estimated that these changes will result in a reduction in the cost base of €20m (£17m] on an annual basis, while one-off costs amount to €10m (£8.5m).”

“The strong position of the order book and active price control of Marel’s products will support gradually increasing revenue growth and improve operating results in the second half of the year, as stated in the earnings announcement for Q1 2022.”

Marel also said the pipeline of new projects remained strong and driven by innovation and increased marketing worldwide to meet expected growth.

“Demand in the poultry and fish industries is strong, but weaker in the meat industry which will affect the composition of income.”