Dairy giant FrieslandCampina posted significantly less profit in the past six months. An interim additional payment to the members of the cooperative is therefore not included and there is an allusion to a reorganization.
While a profit of 139 million euros was made in the first half of last year, this amounted to 8 million euros in the past six months. The disappointing results are no coincidence.
Because the milk price was favorable last year, the guaranteed price that farmers receive for their milk supplied rose with a peak in September. The dairy processor then doubled its profit.
The milk price then fell, but the guaranteed price lagged behind for a month, so that the milk was purchased for a relatively high price while the selling price was low.
Cause
Jan Derck van Karnebeek, who took office as CEO in May, is looking for the cause of the lower milk price in the reduced purchasing power in Europe, Asia and Africa. Consumption is lower in Asia and Africa and consumers in Europe are opting more often for cheaper private labels.
FrieslandCampina takes a close look at the costs and alludes to a reorganization. What this will look like should become clear in the coming months.
Due to the disappointing results, no interim payment of the profit is paid to farmers who are members of the cooperative. Last year this also failed to materialize due to the uncertainty surrounding the war in Ukraine, but a supplementary payment was made at the end of the year.
Grow
Profits did grow on the business units ingredients and special foods such as baby powder. Ingredients include lactose for the pharmaceutical industry, for example, but that market is somewhat limited, according to Karnebeek.
Sales of baby food have increased especially in China. Last year, FrieslandCampina focused more on sales in medium-sized cities in the Chinese hinterland.
The supply of milk increased slightly last year by 0.5 percent. FrieslandCampina would like to continue to grow and is trying to attract new dairy farmers.