Business risks

Atria as an investment

Business risks

Q1/2022

Atria's business, net sales and earnings can be affected by several uncertainties. Atria's 2021 Annual Report provides comprehensive information on risk management and business risks and can be found at https://www.atria.fi/en/group/investors/financial-information/annual-reports/.

Russia's invasion of Ukraine in February 2022 has increased risks in Atria's operations. The war affects world trade in food, grains and energy, both through product availability and price changes.

Ukraine is a major producer of feed grains. Last summer was dry and exceptionally warm in Europe. Grain harvests were small, and there was a shortage of feed grains already before the war. The war further undermines the adequacy of feed grain. As a result, the costs of production farms have increased, and the price of meat has risen.

The risk associated with energy prices has also increased due to the war, as Russia is a major energy producer in Europe. The price of fuels and electricity has been on the rise since the start of the war, and significant price volatility in energy costs is projected to continue.

In particular, cybersecurity and information warfare have become topics of discussion in the wake of the war. Atria is prepared for increasing cybercrime and information system failures. The purpose of systematic monitoring is to ensure rapid responsiveness in the event of an incident. At Atria, improving cybersecurity is an ongoing process.

The Covid-19 virus affects Atria's operations for the third consecutive year. The impact can be seen, for example, in customers' purchasing behaviour, variation in the delivery reliability of suppliers, and in the operation of the logistics chain. The number of sick leave cases has been significant in the first quarter of the year and it is possible that cases will also occur in the second quarter. It is still difficult to predict the mutation of the virus, and controlling the pandemic through vaccination programmes contains uncertainties.

Atria strives to prevent the impact of the pandemic on the health and safe working of its personnel and to ensure a smooth supply chain. Safety-enhancing ways of working, protective equipment, social distancing, information and guidance, and restrictions on visits and travel are used as tools.

A significant part of the pork processed at Atria's Nurmo plant is exported to China. On the Chinese market, the price and demand of meat can fluctuate very quickly, which is a risk to both volume and profitability.

African swine fever is encountered in several European countries, China and Russia. The poultry market experienced uncertainty, as cases of highly pathogenic avian influenza were detected in Europe. Considering the risk of these diseases spreading to Finland, Atria employs prevention measures at its own production plants and contract production farms.