19 November 2009

3 minute read

Europe

Growth and increased earnings in the processing companies, together with financial stability, are the primary factors behind Danish Crown’s satisfactory profit for the year of DKK 1,021 million against last year’s profit of DKK 997 million.

"The strategic approach is proving its worth after a highly challenging year. We have been focused and ambitious in our efforts to strengthen Danish Crown’s competitiveness, and at the end of the financial year we can see that these efforts are bearing fruit," said Kjeld Johannesen, CEO of Danish Crown.

The very positive results for the year have been seen at the foreign production companies and in the processing sector. The Beef Division’s activities in Husum, DAT-Schaub’s international activities and the Pork Division’s foreign factories are contributing to the internationalisation process which is leading to higher supplementary payments for Danish Crown’s members this year.

"We are pleased to see that in the markets where we are operating on equal terms with other companies we have a strong competitive edge," Mr Johannesen said.

At the same time, throughout the year, efforts have been concentrated on reducing the high costs in Denmark.

"In connection with DC Future we have introduced massive cost cuts, because costs in Denmark constitute a barrier. Considerable expenses have been incurred this year to adapt capacity to the smaller number of pigs for slaughter being produced, and this is something which we have felt very acutely," said Mr Johannesen.

Danish Crown’s revenue amounted to DKK 44,765 million against DKK 46,972 million last year. The downturn is primarily attributable to the fall in the value of currencies such as the pound sterling, the Swedish krona and Polish zloty, and secondly to a fall in slaughterings in Denmark.

"But the processing companies are posting good results. The Danish Tulip Food Company is right back on track, and Tulip Ltd. in the UK is reporting record results this year," Mr Johannesen said , while pointing out that Danish Crown is not blind to the fact that the market is still impacted by a lower meat consumption, which is affecting prices.

The results mean a supplementary payment this year of DKK 0.70 per kilogramme to producers of pigs for slaughter against DKK 0.60 last year. The supplementary payment to sow producers is DKK 0.65, which is at par with last year, while the supplementary payment for beef producers is DKK 0.75 against DKK 0.70 last year.

"We have been working extremely hard to be able to offer competitive prices to the company’s owners. The overall plan must be implemented by the end of the next financial year, but there is no doubt that we are on course," Niels Mikkelsen, Chairman of Danish Crown’s Board of Directors said.

"The results for the year are indicative of a very strong company. And this further shows that the strategy of increased internationalisation and processing which we adopted in 2004 has been right," he continued.

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