Analysis Pigs
Pig shortage weighs on Danish Crown results
Danish Crown has again posted a profit in the broken financial year 2023/24, according to its annual report. Despite the green figures, the company sees little reason for satisfaction. The Danish cooperative is concerned about the sharp decline in slaughters, which is seen as a threat. In addition, DAT-Shaub, the division that has been an important driver of profits in recent years, is performing considerably less well.
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In his explanation, chairman of the board of representatives Asger Korsgaard speaks of one of the most difficult years in the company's history. The company indicates that it is difficult to obtain sufficient pigs in Denmark. This is because Danish Crown is not able to pay out sufficiently, writes CEO Niels Duedahl in his explanation.
Slaughter rate decreases
Traditionally, Danish Crown slaughters a large majority of Danish pigs, but the percentage has now dropped to less than half, the CEO writes in the annual report. This is reflected in the slaughter figure. In 2024, Danish Crown slaughtered 15,1 million pigs. In peak year 2021, the slaughter figure was still 18,9 million pigs. That is a drop of no less than 20%. Last year, the company slaughtered 15,6 million pigs. The company loses many of its pigs to export to Germany, where significantly higher prices are paid.
Despite the lower supply of pigs, Danish Crown improved its EBIT by 27% compared to the previous year. EBITDA amounted to 1,85 billion Danish kroner (€250 million at current exchange rates). Turnover also increased from 67,2 (€9 billion) billion kroner to 67,81 (€9,1 billion) billion kroner. However, the company suffered a slight loss in profit. Net profit decreased from 1,47 billion kroner (€200 million) to 1,04 billion kroner (€140 million).
New strategy limits damage
The company's solvency improved from 26,7% to 27,6%. This can be explained, among other things, by the sale of various slaughtering locations. Danish Crown decided to close various slaughtering locations in Denmark and Germany this year. This is also directly reflected in the workforce. In 2022/23, Danish Crown still had 25.796 employees. In 2023/24, the workforce fell to 23.959. The location in Essen, Germany, will probably also be sold.
Finally, the success of Dash Crown's casing producer and residual product processor DAT-Schaub, which has been the driving force behind the profits in recent years, seems to be declining somewhat. The division's turnover fell by 11,6% from 5,3 billion (€710 million) crowns to 4,8 billion crowns (€640 million). Although the turnover is relatively small in total, the margins of this branch have been significant in recent years. For example, the EBITDA last year was 961 million crowns (€129 million). This year, however, the EBIT fell to 588 million crowns (€79 million). The company writes that the demand for various types of residual products was disappointing. In addition, the supply fell due to the lower number of slaughters. The company was therefore forced to import more raw materials at higher costs.