Danish Crown's Solid Mid-Year Performance Amid Difficulties

On May 12, 2014, in Randers, Danish Crown's Group CEO, Kjeld Johannesen, commented on the global market's recent challenges, including the Russian ban on EU pork imports and the PEDV virus that has severely impacted US pig production. Despite these obstacles, Danish Crown's broad global market access has allowed it to remain resilient, benefiting its stakeholders. In the first half of the fiscal year 2013/14, the group reported a revenue of DKK 28.2 billion. Although there was an organic growth of 3.1%, this was a decrease of DKK 0.3 billion compared to the same period in the previous year. This drop was due to lower pork market prices. The results were also negatively impacted by the closure of the Faaborg department, but this was offset by reduced interest expenses and income from the sale of ownership interests in associates. This resulted in a net profit of DKK 813 million for the period, compared to DKK 713 million in the first half of 2013/14. Johannesen attributed the interim results to the company's stable operations amidst a volatile market. In February, Danish Crown agreed to acquire HK Scan's 50% stake in Sokołów, Poland's top processed meat products producer. Danish Crown already owns the other half of the company, and the deal is currently under review by the EU competition authorities. Flemming Enevoldsen, Group Executive Vice President of DC Foods, which includes the processing companies in the Danish Crown group, stated that Sokołów is a growing company. With full ownership, they can further enhance their efforts to leverage the synergies within the group, aligning with Danish Crown's overall strategy. However, Danish Crown's pig producers, who are among its owners, have been facing falling market prices in recent years. This is due to swine fever outbreaks in wild boar in Poland and Lithuania, leading Russia to ban EU pork imports in February. Despite these challenges, Danish Crown continues to offer competitive prices compared to the rest of Europe, according to Erik Bredholt, Chairman of the Board of Directors of Danish Crown. The financial highlights for Danish Crown AmbA for the first half of 2013/14 and 2012/13 were also provided, including revenue, operating profit, profit for the period, balance sheet, equity, capital base including subordinated loans, cash flows from operating and investing activities, supplies by members in millions of kg, and number of employees.