Arla Foods has reported a net profit of €167 million for the first half of 2024 as well as a total revenue of €6.6 billion.
The global dairy cooperative’s performance price for the first six months of the year was 47.5c/kg and its first half of 2024 milk price has increased by 5c/kg milk compared to the second half of 2023.
Arla Foods also said, as expected, it is possible to pay a half-year supplementary payment to farmer owners of 1c/kg milk based on the half-year volumes.
Chief executive of Arla Foods, Peder Tuborgh, said the cooperative is “satisfied” that the momentum created by its farmers owners and employees in 2023 has continued into 2024.
Arla Foods
Arla Foods’ performance price and revenue for the first half of 2024 is slightly lower than in the 2023 half-year report.
In the first half of 2023, Arla delivered a performance price of 49.7c/kg of milk and reported group revenue of just over €7 billion.
Arla Foods said the rising milk price and the half-year supplementary payments are mainly driven by rising commodity prices, Arla’s Fund Our Future transformation and efficiency programme and a return to branded volume growth.
Arla’s strategic brands had a volume driven revenue growth of 4.1% in the first half of 2024 compared to a decrease of 6.0% the first half of 2023.
The growth was spearheaded by the Lurpak, Puck and Arla brands which respectively grew volumes by 7.9%, 4.4% and 3.8% in the first half of 2024.
Arla’s chief financial officer, Torben Dahl Nyholm, said: “We are very pleased to deliver a competitive milk price.
“At the same time, the return to branded growth happened with a higher magnitude than expected due to the strength of our brands and successful efforts to regain growth, so we are on a positive trajectory.”
Outlook for 2024
Looking ahead into the second half of 2024, Arla said it anticipates the volatile market conditions driven by “geopolitical tension and uncertainty” to continue.
However, the positive trend on consumer purchasing power from the first half of 2024 should prolong into the second half, especially in Europe as inflationary pressure continues to subside and wages increase, the dairy cooperative said.
This is anticipated to translate into a continued upturn in the demand for dairy, although it is uncertain how consumers will react to the expected higher retail price levels following the commodity price increases.
The uncertainty is also underlined by a lesser volume of available milk on a global level.
Arla is expecting “strong market momentum” from the first half of 2024 to continue into the second half.
It has adjusted its full-year expectations for revenue from €13.2-13.7 billion to €13.4-13.9 billion and still expects to deliver a profit within the range of 2.8-3.2%.
Arla has also adjusted its full-year expectations for strategic branded volume-driven revenue growth from 1.0-3.0 % to 3.0-4.0 %.
“We are proud that Arla Foods is performing well in a volatile global market,” Tuborgh said.
“Customers around the world are demanding our products, we are ready to deliver, and we will continue to invest in the company’s future.”
