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Arla sees profits and revenue slip in 2015

The European dairy co-operative saw a 3.3 per cent decline in its revenue for 2015


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Arla saw both revenue and profit decline in 2015, the company has revealed.

 

The European dairy co-operative’s revenue for 2015 was was €10.3 billion, a 3.3 per cent decline compared to the year before.

 

The performance price, which measures the value Arla has generated from each kilo of milk supplied by the farmer-owners, was 33.7 euro cent per kilo, with a total volume of owner milk of 12.5 billion kilos in 2015.

 

This compared to 41.7 euro cent per kilo with a total volume of 11.7 billion kilos in 2014.

 

The net profit of the Arla Group in 2015 was €295 million, corresponding to 2.8 per cent of group revenue.

 

 

Profit reduction

 

Chairman of Arla Foods, Åke Hantoft, said: “Normally our profit target is 3 per cent of our revenue, but in August last year the board of directors agreed to reduce the profit target from 3 per cent to 2.7-3 per cent of the company’s revenue.

 

“This reduction was made in favour of the prepaid milk price to support our farmer-owners in their very difficult financial situation, which is caused by the global decline in milk prices."

 

Arla’s board will decide how to appropriate profits at the next meeting on February 23-24.

 

Increasing milk volume

 

As Russia and China took significantly less dairy products in 2015, Arla also had to cope with the fact its overall volume of milk grew by 622m kg to 14.19bn kg.

 

Peter Tuborgh, Arla chief executive, said the remainder of 2016 was set to remain tough for global milk markets.

 

He added: “The global dairy industry has rarely been as tough and unpredictable and 2015 has unfortunately been as challenging as we anticipated.

 

“We have an extremely difficult task ahead of us in 2016 as global milk supply still exceeds demand. We do expect the global market will begin to turn for the better towards the end of 2016.”

 

 


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The UK picture

Overall revenue in the UK increased from €2.8bn in 2014 to €2.9bn in 2015.


And the company also growth in some of its branded products. These included:

  • Record sales in butter and spreads with Lurpak and Anchor (up 4.6 per cent)
  • Strong liquid milk category performance with Cravendale (up 2.1 per cent)
  • Increased sales of Castello cheese (up 6.7 per cent)
  • Double digit growth with on Arla Lactofree product range (up 23 per cent)

Current exchange rate at time of writing was €1=£0.78

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