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Arla Foods Increases First Half Revenue and Payments to Members

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Arla Foods Increases First Half Revenue and Payments to Members

Arla Foods Increases First Half Revenue and Payments to Members
September 05
10:36 2011

Reflecting its merger with the German dairy Hansa-Milch earlier this year and price increases in the international dairy market, Arla Foods has reported a 12% rise in first half revenue to DKr26.7 billion (Eur3.6 billion). However, operating profit fell 38% to DKr608 million following a large increase in the milk price paid to Arla’s co-operative members in Sweden, Denmark and Germany.

 

“While consumers in our key European markets are still exercising restraint due to the new economic crisis, we can note strong growth in our international markets, especially in the Middle East and North Africa, where revenue rose by 18%,” says Peder Tuborgh, chief executive of Arla Foods.

 

Peder Tuborgh, chief executive of Arla Foods.

Sales of consumer packaged milk powder are developing soundly in the Middle East and North Africa, as a result of Arla’s focus in recent years on developing a range of products with a high nutritional value, at a price that is affordable for the consumers in the area. Sales of processed cream cheese also show very strong growth. These products are sold to consumers under the Puck brand, which commands a strong position in the Middle East.

 

Arla’s growth markets such as Russia and the USA also achieved fine growth rates in the first half of 2011.

 

During the period Arla improved its earnings significantly, primarily due to rising world market prices, which made it possible to increase the milk price to the co-operative members very substantially. Arla maintained the high payment in May and June, which impacted on the interim result.

 

For the full year, Arla expects to achieve a net profit of 2.5% of revenue, or approximately DKr1.3 billion.

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