News Half-year figures
Dairy race boosts FrieslandCampina's figures
FrieslandCampina saw its result improve considerably in the first half of this year. The sharp rise in dairy prices gave sales a boost. The profitability of the dairy group has also increased. This is partly due to an improvement in sales in China. Due to the uncertainty in the market, the dairy cooperative sees no scope for an interim supplementary payment to the member dairy farmers.
The sharp rise in dairy prices in recent months is reflected in the figures: turnover increased by 20% compared to the same period last year, to €6,6 billion. Operating profit went from €130 to €328 million, of which €139 million remained below the line. This is an increase of no less than 124% and also the highest level since 2017. A limited part of the improvement in results is due to positive currency effects. The result also includes an exceptional charge of €90 million, as a result of restructuring costs.
A blemish on the results is that the operating cash flow dropped from €46 million to €89 million negative. This decrease is a result of higher working capital due to higher milk and sales prices, as stated in the half-yearly report. This was partly offset by the improved results.
Basic dairy prices significantly higher
The increase in turnover is not so much due to retail turnover, because those volumes were under pressure. In particular the sales towards the out of homechannel and sales of dairy ingredients performed well. The former is a result of the corona measures that were virtually lifted in many countries in the first half of 2022. The sharply higher prices of basic dairy products also contribute positively to the performance of the dairy giant. Just like the sales of baby food in China, which is on the rise again. This is partly due to improved logistics to the smaller cities in the Asian country.
CEO calls numbers good
CEO Hein Schumacher is pleased with the result, but nevertheless speaks of a dynamic half year. He is referring to the cabinet's nitrogen plans and the war in Ukraine. He describes the figures as 'good'. Schumacher is clearly holding a blow for the second half of this year.
Schumacher: "The end of all uncertainties is not yet in sight. We still face challenges in terms of inflation and associated price increases, increasing raw material shortages, declining consumer confidence and the corona pandemic that is certainly not over yet." Nitrogen uncertainty is also something FrieslandCampina is concerned with. "For that reason, we are extra cautious about our outlook for the rest of the year and have decided not to pay out an interim pro forma cash supplementary payment to our member dairy farmers," said the CEO. However, the members saw their milk price increase considerably to almost €60 per 100 kilos.
Read here in an extensive analysis more about the improved half-year figures and the dilemmas FrieslandCampina is currently facing.
Wouter Job
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