Danish Crown strenghtened by the end of 2005/06
 
Strong focus on core business results in strengthening of Danish Crown’’s financial year 2005/06.

The intense focus on business areas, forming the core business of Danish Crown is a step in the long-term strategy. This means – among other things - that Danish Crown has disposed a number of companies during the year.

- We have made a number of substantial cost savings during the year and we see a clear sign that our strategic focus on the core business is strengthening the company, says CEO Kjeld Johannesen, pointing out that Danish Crown has reduced the net interest bearing debt by DKK 1.3bn.

The Group reaches an unchanged turnover of DKK 48.5bn despite the disposal of a number of subsidiaries. The disposal of companies contributes to an increased consolidation and residual payments have been fixed based on the operational result at 65 øre/kg for pigs, 65 øre/kg for sows and 90 øre/kg for cattle.

- The unchanged turnover reflects in the fact that the turnover of the core business has increased when deducting the turnover of the disposed companies. This also indicates that we hold a strong position and that we are ready to meet the challenges with the strategy heading for 2010, says Chairman of the board of Danish Crown, farmer Niels Mikkelsen.

The heavy demand this summer – for example in Germany - has given rise to debate about Danish Crown’’s competitiveness in relations to the German quoted price. However, since the closing of the annual accounts the difference between the Danish and the German quoted price has been equalized.

- It has been a year with heavy non-recurrent expenses in connection with the structural adjustments which have been executed. Furthermore we have had expenses in connection with running-in of the slaughterhouse in Horsens together with current interests and depreciations on the large investment, says Kjeld Johannesen.

In order to adjust the company’’s accounting principle to international standards, Danish Crown has changed the previous accounting principles for residual payment, which is now included in the equity until actually paid.