ShapeShapeauthorShapechevroncrossShapeShapeShapeGrouphamburgerhomeGroupmagnifyShapeShapeShaperssShape

Danish Crown: Interim Results Meet Expectations

by 5m Editor
5 May 2009, at 10:37am

DENMARK - With revenue of DKK 22.7 billion and a net profit of DKK 450 million, the Danish Crown group is posting interim results which matches expectations.

Noticeable growth in the processing sector is contributing, in particular, to the increase in revenue. Danish Crown posted revenue for the first half of FY 2008/09 of DKK 22.7 billion, up just over DKK 1 billion on the same period last year. Measured in øre per kilogram of meat supplied by members, the net profit of DKK 450 million is very close to last year’s results.

“The results reflect growth in the market towards the end of Q2. In the period where the market has improved, we have also seen prices go up,” says Kjeld Johannesen, CEO of Danish Crown.

The financial crisis has further accentuated the challenges already facing Danish pig producers after two years of problematic economic conditions in the primary production sector. The world-market price of pork has fallen markedly during the financial crisis, but since the low point earlier this year, the prices offered by Danish Crown have increased by about DKK 1 in the course of just a couple of weeks.

Increasing exports of piglets in the past six months have meant fewer pigs for slaughter being produced in Denmark. This affects Danish Crown, which has tailored its slaughtering capacity over the six-month period.

Danish Crown’s processing sector has seen growth almost across the board – despite challenges in the form of both fluctuating exchange rates and the financial crisis, and earnings for this sector are markedly up on last year’s level. On the other hand, the company’s trading activities and the individual associated companies have had the wind against them.

The Beef Division has also focused strongly on prices, but the financial crisis has impacted the demand for beef and hides, and the results are thus lower than expected. On the other hand, the Beef Division has seen a growth in volumes compared with last year.

“All in all, we have realised interim results which exceed the outlook for the first six months. However, we are acutely aware of the continuing need for further marked improvements to our competitiveness in relation to the company’s owners, who are under quite a lot of pressure. We are therefore launching a number of initiatives this week which are aimed at strengthening our competitive edge and safeguarding the supply of raw materials,” says Kjeld Johannesen.