It has been revealed that in the first six months of the 2016/2017 financial year, Danish Crown increased its payments for pigs supplied by farmer owners by almost 15%.
This increase is equivalent to DKK 600 million relative to the year before.
Danish Crown Groups CEO Jais Valeur, said: “It’s very positive to be able to pay our owners a fair price for their pigs. We have seen a strong demand for Danish pork in Asia alongside a decline in the production of pigs in northern Europe. These facts have been the key to increase the market price for fresh pork.”
This increase in pork prices as well as stable prices for beef and several minor acquisitions have lifted the group’s revenue over the period by DKK 1.3 billion which sees it surpass DKK 30 billion for the first time in the Danish Crown history.
Good demand and strong sales have ensured solid earnings from the fresh meat business, whilst the earnings in the group’s processing companies have been hit by the fast increase in the prices for raw materials.
By keeping the costs down, Danish Crown has managed to secure an operating profit of DKK 1,026 million.
The net profit is DKK 812 million and is on par with the previous year and is deemed to be acceptable.
Valeur commented: “I am pleased with the significant improvement in the payments to our owners. Never the less I must admit the operating profit in our processing companies haven’t met our expectations.
“This is mainly due to a certain delay. When the pork price rises rapidly we need to increase the prices paid by the retailers and unfortunately it takes some months.”
In the past six months, Danish Crown has launched its strategy towards 2021. This strategy has an objective to develop the business in the four main markets in northern Europe as well as in Asia. In addition, there will be a global focus on four selected categories.
Valeur continued: “We have got off to a good start in our efforts to implement the strategy. We have sold our US subsidiary with a profit of more than DKK 0.5 billion, which will be included in the financial statement of the year, and we have acquired three smaller companies.
“In my opinion we have defined the direction for the future of Danish Crown, but there is still a lot of work to be done if we are to deliver on the ambitious commitment we have given our owners.”
This story was originally published on a previous version of the Meat Management website and so there may be some missing images and formatting issues.
