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Yogurt maker Fage sees profits explode
Greek yogurt producer Fage achieved significantly better results in the first quarter of 2023 than in the same period last year. Turnover grew by 6,8% and net profit almost quadrupled.
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Fage is in the spotlight in the Netherlands because it wants to build a new large factory in the municipality of Hoogeveen, but darker clouds are gathering over those plans. Particularly because the activist environmental organization MOB objects to the intended groundwater use and the discharge of wastewater. Sufficient purification capacity would not be available in a timely manner for this.
The company has not yet responded to these complications, but deadlines for (the start of) construction have already been postponed several times and few definitive investments have been made.
Cheaper purchase, more expensive sale
In the first three months of 2023, Fage's revenue rose 6,8% to $147,5 million. Gross profit increased by 55,5% to $64,1 million, while net profit rose from $5,4 million to $22,9 million.
The profit improvement was due to a combination of lower purchasing prices for milk, especially in Greece, and higher selling prices.
Volume smaller
The better results were somewhat at the expense of the quantities sold, especially in home country Greece and Italy. Sales volume decreased by 2022% compared to the first quarter of 6,9. In the US, Fage's largest sales market, sales volume largely remained at the same level, as in the United Kingdom. Of the total turnover, almost 62% is achieved in the US, while just under 20% is generated in Greece itself. The remaining turnover is achieved elsewhere in Europe, with the UK as the main sales market.
To better serve the growing market in Northwest Europe, Fage wants to build a new factory in Hoogeveen. The company wants to buy the milk required for this in the Netherlands or Germany.