The year 2022 got underway in a highly promising way, the new strategy period was initiated and the company had measures in place to support the organic growth that began already during the previous financial period. Although the exceptionally poor grain harvest from the previous year and the ongoing threatening activities of Russia toward the end of the year had increased grain prices and, in part, other costs as well, but we were prepared for these changes. At the start of the year, however, we couldn’t have predicted the extent to which these factors would devastate the markets as they now have.
Russia’s brutal war of aggression in Ukraine is straining the global food system and Raisio as part of this value chain. Once the war broke out, we very quickly made the decision to stop all export activities to Russia. This firm decision had significant impacts, particularly on the fish feed producer, Raisioaqua Ltd, as two thirds of its net sales are typically from deliveries to Northwest Russia. For this reason, we initiated change negotiations as a means of controlling costs in this unit. Furthermore, the decision was made to transfer our subsidiary in Russia that primarily focused on the sales of oat-based foods to discontinued operations and search for a fast solution to continue the activities of that company.
Despite the dramatic changes in our operational environment during the review period, Raisio’s net sales increased considerably to EUR 55.1 (47.5) million, which signifies an increase of as much as 15.9 per cent. The comparable EBIT, on the other hand, declined significantly as a result of two factors; firstly, the completely unprecedented rise in the price of grain and other costs and, secondly, the planned additional investments intended to boost the growth of the company. Comparable EBIT was EUR 0.1 (4.3) million, accounting for 0.2 (9.1) per cent of net sales. Of the aforementioned factors, the increase of grain acquisition prices and other costs play a more significant part in the decline of profitability.
Raisio has worked resolutely to counter these negative cost impacts, and we believe that our efforts will notably improve profitability as the year progresses. Of course, a loss of 15 per cent in net sales at one go will inevitably have an impact on everything we do in the company over the coming year. The lost business have contributed to financing our growth and now, we must act quickly to rethink the financing of our growth plans and scheduling.
Raisio’s long established and focused strategic position as an industrial manufacturer and marketer of healthy foods and ingredients remains highly relevant. Raisioaqua and the Russian food market were not in the forefront of our strategy, so no significant change in direction is considered necessary. We will continue to follow our chosen path with the strong reinforcement of megatrends with additional consideration for the changing conditions.
The past two plus years have been extremely exceptional. Raisio managed well throughout the pandemic and will continue to thrive despite the exceptional period caused by the war. Within this crisis, the company is faced with relatively larger challenges than it faced during the COVID-19 years, but we will conquer these challenges with the help of our great personnel and other strong suits. I extend my warmest gratitude to the entire personnel for a job well done!