Shares in FirstFarms tumbled 7% after the Eastern European
farm operator unveiled its third profits warning in seven months – reflecting
the discovery of fraud as well as further setbacks at its dairy division.
The group, which is listed in Copenhagen, said that it had
started legal action against "now expelled" staff suspected of defrauding it of
The action includes a claim for a refund of the money, whose
disappearance became evident after the employees, who are also being
investigated by police, moved offices from Bucharest, the Romanian capital, to
the eastern town of Faurei.
The employees have also claimed against FirstFarms for DKK2.0m
over their departure from the company, although the group said these "demands…
are expected to be dismissed" in court.
FirstFarms also revealed charges totalling DKK3m in
write-offs "on a few larger operational assets" held by its dairy operations
and in losses on the sale of 411 hectares of surplus farmland in Romania.
And it unveiled a further hit to profits, of DKK5m, from a
disease outbreak at its dairy business, based in Slovakia, where the discovery of
mycoplasma prompted the group in November to warn on profits.
Mycoplasma is a bacterium which causes a variety of
illnesses in cattle, including mastitis, metritis and pneumonia.
In August last year, it cautioned that Eastern Europe's
drought had hurt its prospects.
The group, which has recorded only one year in profit since
2007, said it was lifting its estimate for its operating loss last year to DKK28m-30m,
from previous guidance of a loss of DKK15-20m.
FirstFarms shares tumbled 7.1% to a DKK31.20 immediately
after the profit warning, before recovering some ground to close at DKK32.50, a drop of 3.3%.