European meat producer Danish Crown has posted a total profit of 1,361 million DKK (€182.4 million) for its financial year 2017/2018, down 51 million DKK (€6.8 million) year-on-year.
The company’s revenue for the fiscal year declined to 61 billion DKK (€8.2 billion), from 62 billion DKK (€8.3 billion) in the previous year.
According to the company, the group’s results have been influenced by continuous losses at its UK business, Tulip Ltd.
'Turbulence In The World Market'
Chief executive of Danish Crown, Jais Valeur, said, "We’re definitely not happy with the financial statements. We’re still badly affected by the problems in our UK business.
"At the same time, a combination of turbulence in the world market, generally low world market prices for pork and a strong euro has significantly undermined our profit in the past year."
The company's gross profit for the fiscal year rose by 146 million DKK (€19.6 million) to 8 billion DKK (€1.1 billion).
This growth was driven by the acquisition of DK-Foods in Denmark, Gzella in Poland, and the Dutch company Baconspecialist Zandbergen.
The company’s Polish business, Sokołów, reported a 26% increase in earnings.
Tulip Food Company in Denmark posted a growth of 29%, driven by a year of improved sales of bacon in Europe, and growth in exports of canned meat.
Both companies have also implemented significant acquisitions during the financial year, which is expected to boost earnings at the two businesses in the future.
Tulip Ltd in the UK reported a profit on ordinary operations in the first quarter of its financial year.
However, it posted a net operating loss of 260 million DKK for financial year 2017/2018, against a loss of 231 million DKK last year.
According to Valeur, the main reasons behind the loss was the company’s inability to fully optimise its supply chain in the UK, coupled with high operating costs.
The company now aims to cut costs by more than 200 million DKK in the 2018/19 financial year.
“We have therefore launched a comprehensive cost-cutting plan, and in the past two months we had to say goodbye to more than 150 salaried employees in the UK business,” Valeur added.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.