FDBusiness.com

After closing the financial statements for its 2014/15 financial year, Danish Crown is paying out DKr300 million (€40 million) more to its owners than last year – based on an unchanged supply of animals. This means that the company will disburse a supplementary payment of DKr1.05 per supplied kg of pork to the group’s owners. Moreover, an additional DKr0.08 per kg will be paid into the newly set up personal subordinated accounts.

At the end of the financial year, Danish Crown posted revenue totalling DKr59.6 billion against DKr58 billion last year – and a profit of DKr1.821 billion compared to DKr1.656 billion last year. Of this, a total amount of DKr1.538 billion will be disbursed to the company’s owners.

Kjeld Johannesen.

“We are working hard to ensure that it pays to be a co-operative member of Danish Crown. At the least, we must be competitive in terms of the prices we pay for their animals. Therefore it is wonderful that we are able to deliver a return which is significantly higher than last year,” says Kjeld Johannesen, president and chief executive of Danish Crown.

Kjeld Johannesen underlines the fact that nowhere in Europe are the current settlement prices sufficient for pig producers to generate a profit at the moment. This is due to a surplus of pork in Europe as a result of the closed Russian market.

“The difficult sales situation on the global market has had a significantly negative impact on the value of pork, and this obviously has a bearing on conditions for pig producers,” he says.

The solid results are due to Danish Crown’s targeted strategic efforts to create growth on the foreign markets and the company’s focus on its processing activities The group’s two biggest business areas – DC Foods and DC Pork – both contributed more than DKr1 billion to primary earnings for the financial year.

However, DC Beef has also seen marked growth after the running-in of the new cattle slaughterhouse in Holsted. Consequently, a supplementary payment of DKr1.55 per kg is being paid to cattle suppliers, in addition to which DKr0.17 per kg is being paid into the newly set up personal subordinated accounts. Finally, this year a supplementary payment of DKr0.90 per kg is being paid to the sow suppliers, with DKr0.08 per kg being paid into the new personal subordinated accounts.

“Danish Crown faces exactly the same challenges as other slaughterhouse and meat processing companies throughout Europe. This is having a significant impact on our owners, and so our delight that Danish Crown is managing better than its European competitors in a very difficult market is slightly muted,” comments Erik Bredholt, chairman of Danish Crown. “It is worth noting that it is, in fact, a company owned by farmers which is posting such strong financial results for the benefit of its owners.”