In the first half of FY 2014/15, the Danish Crown group generated revenue of DKK 29.2 billion, representing an increase of just over DKK 1 billion on the prior-year period. The increase is attributable to organic growth of 4% and the takeover of the remaining 50% of Polish Sokołów.
The operating profit is up 28% at DKK 1,108 million. The marked increase can be ascribed partly to the full consolidation of Sokołów, and partly to the negative impact from extraordinary provisions on last year's results.
A net profit of DKK 852 million is posted for the period against DKK 813 million for the first half of FY 2013/14, where the results were, in fact, boosted significantly by non-recurring income from the divestment of ownership interests in associates.
Substantial contributions have been made to the results by all the group's business areas – DC Fresh Meat (DC Pork and DC Beef), DC Foods (Tulip Food Company, Tulip Ltd, Sokołów and Plumrose USA) and DAT-Schaub and DC Ingredients; also, the continuous investments in foreign companies are beginning to prove their worth.
The acquisition of the remaining half of Polish Sokołów has been shown to be a particularly good investment.
- Sokołów is already a very strong brand in Poland. Following the takeover of the other half of the company, it is seriously contributing to Danish Crown's bottom line – even at a time when Poland is also hard hit by the situation in the Russian market. At the same time, full ownership is also benefiting product development across the borders, thereby creating new synergies, explains CEO of DC Foods Flemming N. Enevoldsen.
However, it has also been a half year in which the massive efforts to adjust production costs in Denmark in recent years are beginning to bear fruit.
- It is no secret that we are still battling with the conditions for having production in Denmark. And that this regularly gives rise to animated discussions both within and about the company. But this is just how it is, and therefore it is also extremely positive that we are now seeing a drop in production costs in Denmark, says Group CEO Kjeld Johannesen, adding:
- At the end of the day, the market prices and our own efficiency determine the prices which we can pay our Danish owners for their animals.
- I am pleased that we have been able to pay average prices which are higher than those paid in our neighbouring countries. It is the clear objective of Danish Crown to run the company for the greatest possible benefit of its owners, and looking at the challenges facing the industry internationally, we are confident that the Danish-owned slaughterhouse group is tackling these challenges professionally, says Chairman of the Board of Danish Crown Erik Bredholt.
Danish Crown is now looking at a second half of the year which traditionally is more subdued.
- Ours is an industry with very considerable seasonal fluctuations, but we are used to that. The positive results for the first half are therefore good news for the full-year results, says Kjeld Johannesen.
| Danish Crown – financial highlights* | ||
| DKKm | H1 | H1 |
| Revenue | 29,228 | 28,212 |
| Operating profit before special items | 1,118 | 944 |
| Operating profit/loss | 1,108 | 864 |
| Net profit for the period | 852 | 813 |
| Balance sheet | 28,245 | 24,973 |
| Equity | 6,453 | 5,560 |
| Cash flows from operating activities | 1,567 | 929 |
| Cash flows from investing activities | -682 | -475 |
| Supplies by members, millions of kg | 683 | 672 |
| No. of employees | 25,923 | 22,469 |
* Consolidated figures inclusive of Leverandørselskabet Danish Crown AmbA