News Dairy
Farmel continues to grow after difficult phase in 2021
Farmel Holding, the parent company of dairy trader Farmel, had a difficult year in 2021 due to losses on the futures market. As a result, losses were incurred, particularly in solid dairy products, and short-term debts increased. Nevertheless, the company remains on the growth track and a positive result is expected again in 2022.
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There was nothing wrong with Farmel Holding's turnover in 2021 (and also in 2022). This increased by €2021 million in 45,3 to a total of €456,7 million, according to the filed annual report. The net result was less. that went from €4,4 million positive to €3 million negative.
This was not the biggest concern for the company. This involved managing costs due to incorrect positions taken on the futures market and hedging margin calls. As a result, the credit position was compromised and adjusted financing had to be renegotiated with banks. The result was a sharp increase in short-term debts and obligations to the bank. This caused shareholders' equity to decline.
Loss already expected and contained
Farmel's loss was in the spring 2022 already mentioned in the annual report of Ausnutria, which has a 50% interest in the Emmeloord company. According to Ausnutria, losses amounting to €12,5 million were initially incurred on short positions for dairy commodities. Farmel responded by stating that this loss would be largely eliminated by the end of 2021. So this came true. However, the volume of short-term debts has increased by almost €40 million.
Further sales growth, better prices
Measures have now been taken to prevent a recurrence of such a situation. The position on the futures market is better managed and the debt position also receives extra attention. In the meantime, good further sales growth can be reported and better selling prices are also being achieved. Meanwhile, Farmel also has a dairy processor Veco Dairy acquired from the Van Rouwendaal family.
Farm dairy not affected
The negative results were almost exclusively achieved in trading activities. The farm milk activities were not affected and did have a positive result. According to the annual report, Farmel also expects strong growth in these activities, because an almost 20% higher payment to ZuivelNL is expected. Farmel also pays dairy farmers a competitive milk price.