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Strong Interim Results After a Year with DC Future

by 5m Editor
6 May 2010, at 7:29am

DENMARK - Yesterday, Danish Crown presented strong interim results to the Board of Directors. With revenue of DKK 21.8 billion and a net profit of DKK 604.4 million, the company is demonstrating that competitiveness has been strengthened through the initiatives launched on all fronts in the past year.

"Most importantly, we are now competitive when it comes to the prices offered to members. After a year with DC Future we can see that all group companies are as a minimum meeting the ambitious targets defined, and that some are even exceeding these targets, which is excellent," said Kjeld Johannesen, CEO of Danish Crown.

Costs in the Pork Division have been reduced by DKK 0.30 per kg, and the Pork Division’s global sales strategy has proven its worth.

"We are generally seeing very strong sales in the markets, and our approach means that we can target sales at those markets where a considerably higher price can be obtained," said Mr Johannesen.

The Beef Division has also posted strong results in the past six months. Considerable cost cuts have been achieved, in particular as a result of the flagging-out of production, and both subsidiaries and processing facilities are at the same time reporting very satisfactory results.

In the same period, Danish Crown’s interest expenses have been low, which has also contributed to the positive results.

"We have decided to invest the interest saved in ensuring that we can implement our Plan B, and at the same time offer competitive prices in the second half without putting earnings under pressure," Mr Johannesen said.

The DC Future plan was launched in May 2009 and is due to run for 18 months to improve earnings and strengthen competitiveness to the tune of DKK 1.3 billion in all. In addition, political burdens of DKK 300 million will be removed.

"We can conclude that we will achieve the overall objectives behind DC Future, just as we have promised members. However, where some areas are contributing more than expected, other areas will take longer. Looking at payroll costs, they will be reduced by 10 per cent through streamlining and cuts, and here we must – as a result of the outcome of the collective bargaining process – find other ways of cutting the last 10 per cent, said Mr Johannesen.

In the short term, the result of the collective bargaining process will be offset by strong results, especially from the processing companies, with Tulip Ltd. in the UK posting another set of excellent figures. At the same time, Tulip Food Company has posted very impressive interim results with increased earnings in almost all markets and a markedly positive impact from the company’s streamlining measures.

"Together with the low interest payments, the excellent results from the processing companies are helping to ensure that we are ahead of our plan," Mr Johannesen concluded.