Results Positive outlook after volatile first half-year

by Editor fleischwirtschaft.com
Thursday, May 23, 2019
Key Figures of Danish Crown*
Photo: Danish Crown
Key Figures of Danish Crown*

The global market for pork has undergone an unprecedented recovery, which boosted Danish Crown’s earnings significantly in the last weeks of the first half-year 2018/19. A total profit from continuing operations before special items of almost 1.1 bn. DKK was posted, which is marginally better than last year.

Despite lower raw material prices for both pork and beef, Danish Crown’s revenue increased by 1.5% from 30.1 to 30.6 bn. DKK. This is explained by a number of acquisitions, the largest of which are in Denmark, the Netherlands and Poland, and which all, as expected, are making positive contributions to earnings. The UK business Tulip Ltd still presents the biggest challenge. Following capacity adjustments and an extreme cost focus, the business is now moving in the right direction.

Since the end of the first half-year, the pig price has increased by 2,30 DKK (+25%), and Danish Crown expects the payment per kg paid to farmers to increase further over the summer.

Having posted extremely strong results last year, earnings in DAT-Schaub have normalised. Overall, earnings in the processing companies are on a par with last year, but the challenge at the moment is converting the dramatically increasing raw material prices for pork into higher consumer prices.

The cattle price peaked in summer 2018, after which prices saw a declining trend in the first half-year 2018/19. Compared to the prior-year period, cattle are being traded at an average price of almost 2 DKK less per kg, which corresponds to a decrease of 8%.

The strategic decision to pool procurement across the group is contributing as planned despite external price increases for energy and transport, among other things. Based on the company‘s experience, there is money to be saved from implementing such initiatives across the group. Therefore, the Executive Board now includes a Chief Operating Officer (COO) who will focus on continuing this work as well as on realising Danish Crown’s sustainability strategy towards 2030.

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