Pre-tax profits at Arrow Group down 20% to €2.34m
Horsemeat scandal hit profits last year at the Waterford food processor
One of Arrow Group Ltd’s subsidiaries, QK Meats, apologised last May for its handling of the horsemeat scandal, which saw profits decline.
The horsemeat scandal hit profits last year at one of the State’s largest food processors, the Co Waterford-based Arrow Group.
Pretax profits at Arrow Group Ltd last year declined by 20 per cent from €2.96 million to €2.34 million.
The group – which employs 1,642 and is owned by brothers, Peter, John and Michael Queally – sustained the drop in profits in spite of group turnover increasing by 13 per cent from €394 million to €446.8 million in the 12 months to the end of December 31st, 2012.
One of the firm’s subsidiaries, QK Meats apologised in May of this year for its handling of the horsemeat scandal.
In a report, the Department of Agriculture strongly criticised QK Meats into how horsemeat got into Irish-made meat products, pointing out that QK knew it had equine DNA in some product imported from Poland from June of last year, but did not tell the authorities until earlier this year.
The company stated it never knowingly incorporated horsemeat into any of its beef products and said no material that tested positive for equine DNA was allowed into the food chain. Minister for Agriculture, Simon Coveney confirmed that QK Meats had broken no laws.
In its accounts just lodged with the Companies Office, the Arrow Group state that it incurred €5.8 million in exceptional costs that included “the impact of the European beef mislabelling issue” along with property impairment and restructuring costs.
The exact cost of the mislabelling issue is not quantified. However, the property impairments total €1.75 million with “redundancy costs” totalling €195,136.
In relation to the cost to the group of the mislabelling issue, the directors state they have made their best estimate of the impact of the issue as it relates to the 2012 financial statements “though the outcome is uncertain at the financial statements approval date”.
According to the directors’ report “2012 has seen reduced profitability due to the significant increase in raw protein costs, European beef mislabelling issue and the increased uncertainty in recovery of the UK market demand”.
The group’s operating profits last year reduced by 10 per cent from €9.9 million to €9 million with pre-tax profits before exceptional items increasing from €7.7 million to €8.2 million.