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FrieslandCampina profit jumps 85%

FrieslandCampina has reported an 85% increase in its first half profit to €192 million. Margins rose due to the sale of more products with a higher added-value, positive currency translation effects, lower purchasing costs and the lower guaranteed price for raw milk. At €5,645 million, revenue was at the same level as in the same […]

FrieslandCampina has reported an 85% increase in its first half profit to €192 million. Margins rose due to the sale of more products with a higher added-value, positive currency translation effects, lower purchasing costs and the lower guaranteed price for raw milk. At €5,645 million, revenue was at the same level as in the same period in 2014. The milk price for member dairy farmers fell to €36.48 per 100 kilos of milk, down from 1H14’s €44.19.

“In the current uncertain markets we were able to achieve a good result,” said Roelof Joosten, CEO of Royal FrieslandCampina. “This proves the success of the route2020 strategy, aimed at achieving sustainable growth and value creation, which we have followed since 2010. Thanks to our strong market positions and cost reductions we have managed to compensate the drop in the guaranteed price for the member dairy farmers to an extent in the milk price. As a result we will be able to pay the member dairy farmers an interim pay-out of just over 2.00 euro.”

In its outlook, FrieslandCampina said that the worldwide offering of milk is expected to increase slightly in the second half of 2015. Demand for dairy products in local markets and on the world market is likely to increase very little due to the lagging demand for dairy raw materials in China and Russia’s on-going boycott of dairy products from the European Union. This is likely to continue putting considerable pressure on the sales prices of dairy products in the second half of the year. FrieslandCampina is not making any concrete statement regarding the expected result for the whole of 2015.