News milk
Dairy trade Hoogwegt sees profit doubling
Dairy trader Hoogwegt has benefited from the high prices on the dairy market in 2022. Turnover increased by more than 37%, net profit rose generously. However, the profit margin in relation to turnover remains marginal.
Read this article?
Become a subscriber and get instant access
Choose the subscription that suits you
Turnover increased by €1.054 million to €3.852 million, an increase of just under 38%. With the turnover of more than €3,8 billion, Hoogwegt sets a record.
Profit meanwhile increased by 105% from €19,8 million in 2021 to €40,6 million in 2022. This is a good result, but in terms of profit margin, the profit for 2022 represents a margin of 1,05% (which is not is unusual for trading companies).
EMEA region
It is striking, but ultimately not surprising, that Hoogwegt achieved the best sales results in the EMEA region (Europe, Middle East, Africa). There, sales increased by €965 million to €2.540 million, while sales in the Asia-Pacific region fell from €621 million to €428 million. Turnover in the Americas increased from €581 million to €884 million.
Hoogwegt does not make any statements about volumes of product sold. The sharply rising dairy prices put a strain on Hoogwegt's balance sheet, because additional financial arrangements had to be made to keep sufficient working capital available for trading activities. As a result, solvency fell from 25,4% to 21,7%.
Lone Star
The Arnhem family business is mainly active in the dairy trade, but is also partly active in production. The company has a joint venture with the Texas Lone Star Dairy for the production and marketing of high-quality dairy products. This collaboration is going well, but has faced a number of challenges, according to the annual report. Another joint venture for production is that of Hoogwegt subsidiary Meelunie with the Danish Sacca-Dana for the production of (Fava) bean protein. This collaboration is recent.