News Half-year figures
Empty slaughter hooks and lower profit at Danish Crown
These are challenging times for the Danish cooperative meat company Danish Crown. While costs have risen sharply, the pig supply in Denmark has shown a historically large decline. The combination of these factors means that profits in the first half of the broken financial year 2022/23 fell considerably. Reorganizing internally is the only remedy to remain competitive.
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Turnover increased by 15% in the first half of the financial year (which runs from July to December) to €4,6 billion. However, costs also increased considerably, by as much as €335 million. This was due to significantly higher purchasing prices for pigs and cattle, but also to packaging prices and personnel costs. In addition, the ownership rate in the factories is also a point of concern. This is because the pig supply in Denmark fell by as much as 13% compared to the same period last year. The supply of cattle is also declining.
Danish Crown is still making a profit, but significantly less than in the same period last year. Income fell by 18% to €121 million. This means that Danish Crown is still extremely profitable compared to European competitors.
Difficult market conditions
Management speaks of difficult market conditions. In their own words, action is needed to safeguard competitiveness. Particular attention is paid to costs. Danisch Crown is undergoing a major reorganization that is reflected in various places and ways. For example, 150 jobs disappeared at the factory in Sæby, Denmark. In addition, a factory in Boizenburg, Germany, will be closed, while activities in Essen have been restructured. According to CEO Jais Valeur, these were necessary steps to reduce costs.
When we zoom in on the different divisions, a mixed picture emerges. The subsidiary DAT-SCHAUB, which sells animal products to the pharmaceutical industry, made a less positive contribution to the result than in previous years. The beef division is running stable, while the meat processing activities are highly susceptible to the effects of inflation. Consumers have noticeably less to spend. However, Danish Crown expects a turnaround as inflation normalizes.