Arla increases supplementary payment over 2021 by half

The subsequent payment is largely dictated on the basis of a few clear guidelines. With a profit margin of 2,8%, a minimum of €1,00 per 100 kilos is paid out in cash. Two-thirds of the remaining profit remains in the company and one-third is in the name of the member. In both cases, this concerns equity and is therefore recorded as such in the books.

With a projected profit expectation of at least 2,8%, the financial institutions agree that more cash can go to members and less needs to be consolidated within the company as equity. The good financial situation of Arla Foods allows such an outcome. 

Additional payment has already been partly paid in advance
For this year, this means that €1,50 per 100 kilos will go to members as a minimum additional payment and less money will be committed as capital in the company. The cash subsequent payment is already partly paid as an advance. This amounts to €1,00 per 100 kilos over the first six months of the year. The remainder will be paid in March 2022 when the 2021 annual figures are announced.  

A company with 2 million kilos of milk in 2021, with half of the volume delivered before June 30, can expect a cash back payment of a total of €30.000.

FrieslandCampina scenario not applicable
According to Arla, what is currently happening at FrieslandCampina cannot happen to her. At FrieslandCampina, a lot of capital is still held by the non-active members. Banks have indicated that they regard this as a debt and not as assets. As a result, the Amersfoort processor had to adjust financing to restore equity. This causes unrest among members, because they suddenly have to finance additionally so that solvency is not compromised.

Such a situation does not apply to Arla because it pays out the full capital of the no longer active members within three years after stopping milk production. In addition, Arla invests at least as much money in the company every year as it pays out. This capital is 100% valued as equity.