Danish Crown reports drop in profits
Meat processor Danish Crown has posted a net profit of DKK 819 million for the first six months of the 2015/16 financial year, which is down from DKK 852 million the previous year.
On the financial results, Jais Valeur, president of Danish Crown, commented: ”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.
”The challenges facing Danish Crown on a daily basis include a weak demand for and an excess supply of meat in neighbouring European markets,” Valeur reasoned. ”The UK subsidiary Tulip UK Ltd has been battling particularly strong headwinds, and targeted efforts are being made to strengthen the company’s position.”
Valeur noted, however, that positively there were sales increases in Asia and that Danish Crown’s fresh meat activities actaully succeeded in increasing earnings on the continent through the dedicated sales efforts.
Danish Crown is domiciled in Denmark, however is said to have activities and sales in more than 130 countries.
Valuer concluded: ”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.”
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