Danish Crown posts operating profit
RANDERS, Denmark – Danish Crown reported a profit for the first half of fiscal 2013-2014 despite weak demand in Europe and lack of access to Russia's meat market.
In the first half of FY 2013/14, Danish Crown reported revenues of DKK 28.2 billion ($5.2 billion), down DKK 0.3 billion compared to the year-ago period. The company attributed the decline to lower market prices for pork. The closure of a department in Faaborg was offset by lower interest expenses and income from the sale of ownership interests in associates, resulting in a net profit for the period of DKK 813 million ($150 million) compared to DKK 713 million ($131.5 million) for the first half of FY 2013/14.
"The world market has, for the past six months, been characterized by the Russian import ban on pork from the EU as well as the PEDv virus which has hit the US pig production hard. In such a difficult market, Danish Crown's strength is its wide market access globally. It gives us room for maneuver, for the benefit of our owners," said Kjeld Johannesen, Danish Crown's Group CEO.
Headwinds for Danish Crown pork producers include declining prices for pork. Also, outbreaks of swine fever in wild boar in Poland and Lithuania prompted Russia to ban pork imports from the European Union in February.
"This is an extremely unfortunate situation," said Erik Bredholt, chairman of the Danish Crown board of directors. "The outlook for the first half of 2014 was pretty good for the Danish pig producers, but the situation has now grown quite a lot more challenging. Despite the very difficult market situation, Danish Crown is paying very competitive prices compared with the rest of Europe."