FrieslandCampina reports difficulty in first half

The revenue of Royal FrieslandCampina rose by 3.5% to €5,713 million in the first half of 2014 (versus €5,524 million in 2013), but it has not been an easy six month period for the dairy group. “The combination of a strong euro, a high milk price, falling sales in a number of Asian markets and general political unrest all affected FrieslandCampina’s results during the first six months of 2014. Despite these developments, higher sales prices led to a further growth in revenue. The consumer market ‘infant nutrition’, which is one of our strategic growth categories, performed especially strong,” says Friesland Campina CEO Cees ’t Hart.

Though the markets in Asia are shrinking (especially Indonesia and Vietnam), the company is seeing continued growth in China and there are discussions regarding the establishment of a new joint venture with China Huishan Dairy Holdings Company in China.

The increase by 3.5% is due to higher sales prices (6.4 %) and acquisitions (1.7 %) and despite negative currency translation effects (-3.2 %) and smaller volumes (-1.4 %). The company’s profit has gone down by €60 million (36.6 %) to €104 million, where the negative currency translation effect on profit amounts to €44 million.

The members of FrieslandCampina’s has delivered 4,819 million kilos of milk in the first half of this year, which is an increase of 3.8% on the first half of 2013, when 4,641 million kilos were delivered. Operating costs in the first half of 2014 rose by 5.5% to €5,544 million due to higher raw materials and packaging materials costs (first half of 2013: €5,253 million).