Tough year for Arla Foods
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- 10 December 2004
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Arla Foods’ result for the financial year 2003/04 was affected by increased competition, a weak dollar and lower export subsidies, Managing Director Åke Modig told a meeting of Arla Foods’ Board of Representatives in Copenhagen this week.
At the meeting, the Board of Representatives approved Arla Foods’ Supervisory Board’s recommendation for 2003/04, i.e. a consolidated result of DKK 1,019 billion.
The supplementary payment for the Group’s co-operative members was DKK 586 million while consolidation was DKK 433 milion of which DKK 123 million is reconsolidation.
”This has been a tough year,” Åke Modig said. “The EU’s agricultural reform, the most comprehensive ever for the milk sector, affected the market. The EU Commission’s aggressive stance and the weak dollar thus impacted negatively on our earnings.”
Despite his disappointment with the result, Åke Modig pointed out that overall revenue remained above that of the peer group of the five European dairy companies against which Arla Foods measures its performance.
The ingredients area and exports to overseas markets are the main victims of the weak dollar and the EU’s policies on subsidies. However, price pressure is also being felt in Denmark and Sweden.
On the upside, Åke Modig mentioned good performances in Spain, Italy and Norway. Exports to the UK also developed positively in a market with further opportunities for growth.
Arla Foods is an international dairy company owned by 9,700 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands. Arla Foods is one of the leading players in the international dairy arena with well-known brands like Arla®, Lurpak®, Puck® and Castello®. Arla Foods is focused on providing good dairy nourishment from sustainable farming and operations and is also the world's largest manufacturer of organic dairy products.