Higher prices paid to farmers and higher throughput in its abattoirs has helped reduce costs and increase profits at the Danish Crown Group in the first half of its financial year.
The group has posted its interim half year results for the half year period since its 2009/10 year ended on October 3, 2010. The group posted revenue of $4.7 billion in the current half year against $4.14 billion in the same period last year. Net profit in the half year was $141 million compared with $126 million last year.
“Danish Crown’s current stability is extremely valuable to the group, and th
e results meet our expectations, when factoring in the acquisitions made in the past year,” said Kjeld Johannesen, CEO of Danish Crown, in the group’s press statement. Johannesen noted that Danish Crown is slaughtering 21,000 pigs more a week in Denmark than during the same period last year, and this has contributed to reducing direct costs in the Danish companies. Johannesen pointed that the farmer-owners of the Co-op needed competitive prices and that this implied that margins would be squeezed in the processing side of the business.
“Although the processing companies generated good results in this half year, the increased raw material prices may temporarily put a damper on earnings in the second half of the year,” explained Flemming Enevoldsen, CEO of the Tulip Food Company. “Like virtually all other food production companies, we have seen significant price increases in respect of raw materials as well as packaging and transport in 2011. Together with a strong Danish krone, this will result in higher consumer prices, which all in all will add to the pressure on Danish food production.”
Almost all parts of the group returned satisfactory results – pork and beef processing and trade activities are posting the expected results. During the period, Danish Crown acquired Germany’s fourth-largest pig slaughterhouse, and the results from the first months there serve as a modest boost to consolidated results.
Source: newsroom - meattradenewsdaily.co.uk
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