FDBusiness.com

Interim Profit Falls at FrieslandCampina Due to Losses on Milk Powder and Cheese

 Breaking News
  • HKScan Strengthens its Meals Offering With Investment in Estonia HKScan, the leading Nordic food company, plans to invest in its Rakvere unit in Estonia. The €8 million investment will go towards modernising the unit’s frying department, including the expansion of the building and the installation of new cooking and packaging lines enabling implementation of new technologies and packaging solutions. Construction is to commence in [...]...
  • Food and Drink is at the Heart of the UK’s Largest Packaging Show Packaging Innovations, Empack and Label&Print returns to Birmingham’s NEC on 28 February-1 March 2018, and is set to be the most innovative show to date. With over 290 exhibitors already signed up, the UK’s largest annual event for the entire packaging supply chain will feature the latest industry innovations and technologies, alongside a major free-to-attend [...]...
  • AGRO Merchants Group Acquires Grocontinental AGRO Merchants Group, a global leader in cold storage and logistics solutions, announced today the acquisition of UK-based Grocontinental Limited. This transaction reinforces AGRO’s position as the leading cold storage and logistics provider in the United Kingdom and Ireland, deepens its commodity expertise, and substantially enhances its value-added service offerings for customers. David Grocott and Linda Grocott, third generation owners of [...]...
  • Trade Fair and More – The Event and Congress Programme For Anuga FoodTec 2018 Resource efficiency will be the primary focus of Anuga FoodTec 2018, the leading international supplier fair for the food and beverage industry, which will be held in Cologne, Germany from 20 to 23 March 2018. Around 1,700 suppliers from more than 50 countries will be presenting their new products for the production and packing of [...]...
  • TINE to Invest €77 Million in New Jarlsberg Plant in Ireland TINE, Norway’s largest farmer-owned dairy co-operative, is to invest €77 million in a dairy with the capacity to produce 20,000 tonnes of Jarlsberg cheese a year. The goal is to secure and strengthen Jarlsberg sales outside of Norway as export supports are phased out in 2020. This will make export of Jarlsberg from Norway unprofitable. “Jarlsberg [...]...

Interim Profit Falls at FrieslandCampina Due to Losses on Milk Powder and Cheese

Interim Profit Falls at FrieslandCampina Due to Losses on Milk Powder and Cheese
September 02
10:12 2016

International dairy co-operative Royal FrieslandCampina has reported a 16.7% decline in profit for the first half-year 2016 to €160 million and a 2.2% drop in revenue to €5.52 billion compared to the same period in the previous financial year. Due to the significant increase in the member dairy farmers’ milk production, which rose by 11.9%, basic dairy products such as milk powder, foil cheese and butter were produced that had to be sold below cost. However, FrieslandCampina did achieve growth in volume in infant nutrition in China and South-East Asia, dairy-based beverages in South-East Asia and Eastern Europe and ingredients, with improved results.

The decrease in first half revenue due to lower sales prices was largely compensated by a higher volume. The milk price for member dairy farmers decreased to Eur30.24 per 100 kilos of milk against Eur36.48 in the first half of 2015 due to the lower guaranteed price for raw milk and the lower value creation. The interim pay-out amounts to Eur1.170 per 100 kilos of milk, down from Eur2.018 in 2015.

Roelof Joosten.

Roelof Joosten.

Roelof Joosten, chief executive of Royal FrieslandCampina, comments: “We can look back on a special first half year. FrieslandCampina is doing well in Asia and with ingredients, realising a fine 2.3 percent growth in volume with added value products. Due to the increased milk production, we had to process significantly higher volumes of milk into basic dairy products that we could not sell at a profit in the market. This is visible in the 17 percent decrease in both profits and milk price for the member dairy farmers.”

The outlook for the remainder of the year is brighter as milk prices appear to have bottomed out. According to FrieslandCampina, in the second half year of 2016, worldwide supply of milk is expected to decrease compared to the first half year, although demand for dairy products is likely to show only a modest increase over the second half year of 2016. This is due to the limited purchasing power in many oil-exporting countries, political instability in many countries, the limited demand for dairy materials in China and Russia continuing to block the European Union’s dairy products.

The effect of the European Commission’s measures to reduce milk production in the European Union based on support measures is as yet unclear. The impact of possible voluntary restriction of production of co-operatives or producer associations are also unclear. The Netherlands is expected to impose measures to reduce phosphate production in cattle farms to fall under the level of 2 July 2015. It is as yet unclear whether or not this may lead to a reduction of the milk production in 2016.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • January 8, 2018RAI Exhibition
  • January 16, 2018Sival Plant Production Trade Show
  • January 17, 2018Dutch Organic Trade Fair
  • January 17, 2018Anfas Food Product
AEC v1.0.4

find food jobs

The Magazine

F&D Business Preferred Suppliers

New Subscriber





Subscribe Here



Advertisements