Flat Interim Sales and Profits at Danish Crown
Danish Crown posted a net profit of DKr 819 million (€110 million) for the first six months of the 2015/16 financial year, down slightly from the DKr852 million achieved in the corresponding period of the previous year. The Danish meat group’s revenue at DKr29.42 billion was also relatively static against DKr29.23 billion in the first half of 2014/15.
Based at Randers in Denmark, Danish Crown has activities and sales in more than 130 countries.
Jais Valeur, new President and CEO of Danish is reasonably satisfied with the results. “The retail market is extremely competitive, it is dominated by ever-larger chains, and it is characterised by an increasing focus on discount products and a constant demand from consumers for lower prices. This is putting pressure both on livestock farmers and on the prices paid to farmers in general. Seen in this light, posting results which are marginally below those for the prior-year period is satisfactory,” he says.
Jais Valeur.
The challenges facing Danish Crown on a daily basis include a weak demand for and an excess supply of meat in neighbouring European markets. The UK subsidiary Tulip UK has been battling particularly strong headwinds, and targeted efforts are being made to strengthen the company’s position.
However, positive market developments are also being seen – sales in Asia, in particular, are increasing, and Danish Crown’s fresh meat activities have actually succeeded in increasing earnings in this part of the world through dedicated sales efforts.
Despite fierce competition in the retail market for processed products such as sausages, cold cuts, canned products and soups, Danish Crown Foods has maintained earnings. However, overall revenue was flat.
In the first half, Danish Crown took over control of the Swedish subsidiary Dalsjöfors, which now is being integrated with the existing activities in Sweden.
“Altogether, the interim results confirm what I have been saying since taking over as President and Group CEO in mid-January: Danish Crown is a well-managed and well-invested business. However, we are also a part of a food sector which is under pressure and undergoing rapid change. For Danish Crown to maintain its leading position in the market, we must become even better and work even harder to create value for our 8,000 owners and suppliers,” adds Jais Valeur.
