Group result: DKK 762 million

Group figures
(DKK m) 1998/99*)1997/98 Net turnover 25,38123,771 of which abroad 16,17715,138 Result after tax 762490 Number of staff 13,60413,218 *) 53 weeks

With a Group result of DKK 762 million and a result for the parent company of DKK 589 million, the financial year 1998/99 saw an improvement on the previous year when the Group result totalled DKK 490 million and the result for the parent company amounted to DKK 556 million. The figures were announced at Thursday's meeting of the company's Board of Representatives.

Of the result, DKK 505 million will be paid out as supplementary payments while DKK 65 million will be allocated to consolidation and DKK 19 million assigned to interest on personal accounts. The parent company's result should, however, be seen on a background of a fall in milk prices of approximately 8 øre. This is partly due to tough international competition and partly to the battle for market shares in the domestic market in the first half of the year.

International competition resulted in large cheese supplies being available in the European market which led to heavy pressure on prices. MD Foods' added value strategy combined with increased focus on marketing, especially in Germany, have, however, meant that MD Foods has been less affected by market competition than some of the large continental dairy companies.

The net result ex farm was 241.63 øre per kg against 249.69 øre the previous year.

The advance in the Group result is based on advances in almost all subsidiaries, with the UK as the most important.

"There is no reason to hide our satisfaction with the very positive development in the UK subsidiary, MD Foods plc, and in the UK Division in general," said MD Foods' Managing Director, Jens Bigum. However, Jens Bigum expects the fierce competition in the UK market to continue.

The packaging company Danapak's profits exclusively derive from extraordinary earnings from the divestment of its cardboard division during the year.

During the financial year, the Group's turnover increased from DKK 23,774 billion to DKK 25,318 billion, primarily as a result of the merger with the second largest dairy company in Denmark, Kløver Mælk. For the same reason, the parent company's turnover rose from DKK 13,661 billion to DKK 16,584 billion. During the year, MD Foods' equity capital rose from DKK 2.9 billion to DKK 3.5 billion. Of this DKK 475 million derives from the merger with Kløver Mælk while the rest comes from improved results in non-dairy related associated companies.

Parent Company 1994/95 1995/96 1996/97 1997/98 1998/99*) Net result (DKK m) 503583627556589 Supplementary payments
(DKK m) 444568580492505 Consolidation (DKK m) 5915476465 Equity (DKK m) 2,1222,5692,6692,6453,380 Milk volume (1,000 tons) 2,9663,0073,1653,2204,096 Number of dairy farmers 9,4618,9198,7148,1809,479 *) 53 weeks