FrieslandCampina has reported a first half profit of €192m, up 85% on the first half of 2014.
Margins rose due to the sale of more products with a higher added-value, positive currency translation effects, lower purchasing costs and the lower guaranteed price for raw milk, it said.
At €5,645m revenue was at the same level as in the same period in 2014 (€5,635m), FrieslandCampina said.
The milk price for member dairy farmers fell to €36.48/100kg of milk (first half of 2014: €44.19) due to the lower guaranteed price for raw milk.
It said that its interim pay-out amounted to €2.018/100kg of milk (2014: €0.825).
Roelof Joosten, CEO of Royal FrieslandCampina NV said that in the current uncertain markets it was able to achieve a good result.
“This proves the success of the route2020 strategy, aimed at achieving sustainable growth and value creation, which we have followed since 2010.
“Thanks to our strong market positions and cost reductions we have managed to compensate the drop in the guaranteed price for the member dairy farmers to an extent in the milk price.
“As a result we will be able to pay the member dairy farmers an interim pay-out of just over €2.00.”
Revenue at FrieslandCampina was stable in the first half of 2015 at €5,645m due to 1.6% positive volume-mix effect, 6.4% lower sales prices and favourable currency translation effects of 4.4%.
It said there was lower volumes in Western Europe due to difficult market conditions. In the second quarter of the year lagging demand coupled with an increased supply of milk puts pressure on prices, especially of commodities, it said.
Outlook
The worldwide offering of milk is expected to increase slightly in the second half of 2015, FrieslandCampina said.
Demand for dairy products in local markets and on the world market is likely to increase very little it said and this is due to the lagging demand for dairy raw materials in China and Russia’s on-going boycott of dairy products from the EU.
This is likely to continue putting considerable pressure on the sales prices of dairy products in the second half of the year, it said.
FrieslandCampina is not making any concrete statement regarding the expected result for the whole of 2015.
