In its half-year report, the business recorded a marginal profit increase to DKK1.1bn on the same period of 2018, while revenue grew 1.5%. Operating profit for the full year is expected to be above last year’s result.
Although the first three months of the period proved tough for the business, a rise in exports to China drove Danish Crown’s success in the latter portion of the period.
Jais Valeur, group CEO of Danish Crown, said: “All in all, it is an acceptable result, but it has been a challenging six months. The first quarter was weak, and we therefore presented a comprehensive cost-cutting plan, which will reduce costs by DKK385 million across the group. We are now beginning to see the results of this, and following the recovery of the market, things are finally moving in the right direction.”
It said that UK business Tulip still presented the “biggest challenge” although following capacity adjustments and an extreme cost focus, it was “now moving in the right direction”.
Valeur said: “We still have a long hard journey ahead of us to get the UK business back on track, but the plan we devised over the summer and autumn of 2018 has had the desired effect. Our focus is now on staying on course and winning new business to ensure that Tulip can once again start contributing positively to earnings in Danish Crown.”
It reported that pig prices increased by 25% during the period, leading Danish Crown to expect the amount per kg paid to farmers to increase further over the summer.
“It is very satisfying to see that pig prices are increasing, because it is good for our owners’ businesses. On the other hand, it is a huge task for our processing companies to pass on such significant price increases in a market where the retail chains – particularly in the mid-range segment – are experiencing stiff competition from the discount chains,” added Valeur.
Cattle was reported as being traded at an average price of almost DKK2 less per kg, which corresponded to a decrease of 8%.