Farmel sees recovery after a difficult second year

In total, Farmel recorded a loss of €5,5 million last year, which is €2,5 million more than in 2021. In the first half of this year, a profit of €6,1 million was made and it is expected that the entire year will be positive, according to financial director Johan Westhoff.

The total turnover in the first half of 2023 was proportionally slightly lower than could be deduced from the annual figures for 2022, but the dairy market as a whole is also considerably lower. What helped Farmel in the first six months of this year is the greatly improved margin, partly as a result of contracts concluded last year and ongoing contracts.

The loss in 2022 came from two sides. The sharply increased purchasing costs for milk and dairy products could only be passed on to sales after a delay. Then the current sales contracts worked against us. In addition, an unforeseen loss had to be recorded due to additional costs at Veco Zuivel. There, extra maintenance and organizational issues caused higher than expected costs.

Due to high dairy prices, turnover increased last year from €457 million (2021) to €727 million, a plus of 60%. Turnover outside the Netherlands increased slightly more than in the Netherlands. Last year, more than 53% of turnover was booked cross-border, including in Belgium. Shareholders' equity did take a dip due to the strong price and turnover increase. That fell from 18,7% to 13,3%.

Oolder cause
Farmel's problems are partly caused by losses made in 2021 on the dairy futures market. Positions had to be covered there, which placed a significant burden on the dairy trader's resources. Last year, the company failed to turn the tide due to the strongly rising market. As mentioned, the expensive purchasing costs could not be passed on directly to customers.

Veco Dairy
In addition, there were setbacks at Veco Zuivel, which is now a private label supplier for Jumbo. Due to a higher occupancy of the lines, there were considerably more maintenance costs, while the organization was not fully prepared for the higher pace. These various causes stood in the way of a more structural recovery, but additional agreements have been made with the bank for this. Farmel is successfully catching up this year, something the in-house accountant confirms.

As part of an adjustment to the organization, the fruit and vegetable trade Holland Agri Foods has been sold.

Farmel is 50% owned by Ausnutria, which in turn is 70% owned by Yili, also Chinese. The other 50% of Farmel is owned by management.