Danish Crown reports improving earnings amid ongoing recovery efforts

DENMARK – Danish Crown is continuing to implement its recovery plan during the first half of the 2024/25 financial year, with cost-cutting measures and operational changes starting to show results.

The company reduced its distribution and administrative expenses by approximately US$13.5 million (DKK 94 million), even as it incurred one-time costs of about US$14.4 million (DKK 100 million) linked to organizational restructuring.

Earnings before interest and taxes (EBIT) rose by 2.3%, increasing from around US$185 million (DKK 1,281 million) to nearly US$189 million (DKK 1,310 million), despite these exceptional costs.

CEO Niels Duedahl said the group is seeing better financial control and improved cash flow, although he acknowledged that Danish Crown has not yet regained full competitiveness.

He highlighted progress in previously underperforming areas, including positive contributions from the Essen slaughterhouse in recent months.

Danish Crown has also exited its Pinghu, China operation, closing the factory and entering into a conditional agreement for its sale.

Despite progress on earnings, total revenue declined 3.2% from roughly US$4.83 billion (DKK 33.5 billion) to around US$4.67 billion (DKK 32.4 billion), which the company attributes to falling global pork prices and fewer pigs being supplied to Danish slaughterhouses.

However, tighter operational management and improved margins led to a 6.2% rise in net profit, which climbed from about US$106 million (DKK 764 million) to US$112 million (DKK 811 million).

Group CFO Anders Aakær Jensen said the company’s financial leverage improved from 3.6 to 3.0 year-on-year, supported by earnings growth, lower working capital needs, and moderate investment levels.

This has resulted in a 12% reduction in net debt, equivalent to roughly US$246 million (DKK 1.7 billion), further stabilizing the company’s financial position.

Toward the end of the reporting period, global pork prices began to rise, enabling Danish Crown to offer more competitive payments to its pig suppliers.

According to Jensen, the current price level now makes pig delivery to Danish Crown a profitable activity for producers.

Beef division sees mixed results

The company reported a 13% year-on-year increase in payments to Danish farmers supplying cattle, driven by strong European demand for beef.

While Danish Crown Beef has seen success in increasing the value of processed beef and improving its retail presence, the group’s cattle operations in Germany and its hide-processing unit Scan-Hide are underperforming.

Elsewhere, Danish Crown’s portfolio companies showed steady results, with improvements reported at Polish firm Sokołów, stable operations in Sweden through KLS and ESS-FOOD, and weaker performance from DAT-Schaub due to challenges in the global heparin market.

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