DENMARK, Randers. While the coronavirus crisis put Europe on stand-by, Danish Crown ended the strongest-ever six-month period in Group history. Net profit was up 46%, close to DKK 1.4 bn.
The results, which included strong improvements in bottom-line figures and settlement prices for their owners’ pigs, has not played a big role in recent weeks. More or less simultaneously with the end of the first half of our 2019/20 financial year, the corona crisis began to impact settlement prices for the company’s owners.
Revenue was up 18% from DKK 26,987 mill. in 2018/19 to DKK 31,834 mill. driven especially by an increase in the pork price. Operating profit increased by 43% from DKK 1,220 mill. to DKK 1,750 mill., while the net profit rose 46% from DKK 960 mill. to DKK 1,391 mill.
At the end of the six-month period, the Group’s ratio of its net interest-bearing debt to EBITDA (financial gearing) was 2.7. This is considerably lower than at the same time last year, when the financial gearing was 3.7.
In broad terms, the company has succeeded in passing on the rising prices of pork to its selling prices. On the respective domestic markets in Sweden and Poland, KLS Ugglarps and Sokolow have witnessed strong demand for local products, consolidating their market positions. Improving its sales to the pharmaceuticals industry, DAT-Schaub contributed to continued revenue and earnings growth.
Unfortunately, the market for beef and veal remains challenged with prices remaining stable, but at a low level. While the section Beef generally experienced operational improvements, the outbreak of Covid-19 has caused greater uncertainty, putting on hold otherwise buoyant developments in, among others, Scan-Hide, the hides producer. Toward the end of the first half, beef prices were the first to be hit, and prices of pork were quick to follow. The pace of markets re-opening, especially in Europe, will determine when the markets will start to recover.