FrieslandCampina profits bolstered by butter and cheese price recovery | Progresiv
FrieslandCampina has posted profit uptick and milk price recovery for dairy farmers as the Dutch dairy cooperatives sees its revenue increase by almost 11 percent for the first-half of 2017, as butter and cheese price recovery contributes to solid results. It’s been a very busy period for FrieslandCampina with plans for a big company restructure and selling off its juice division, among other strategic developments, and now financial results show revenue increased by 10.7 percent to 6.1 billion euros over the first half-year 2017, while profit went up 1.3 percent to 162 million euros. 
Revenue increased due to an increase in sales prices and the acquisition of Engro Foods in Pakistan. Last December, Royal FrieslandCampina N.V. acquired a majority stake of 51 percent in Pakistan’s second largest dairy producer, in partnership with the World Bank Group's International Finance Corporation and the Dutch development bank FMO.
The increase in revenue to 6.1 billion euros is due to the increase in higher sales prices of 10.3 percent and the acquisition of Engro Foods in Pakistan at the end of 2016 of 2.4 percent. On balance, currency translation effects had a negative effect of 53 million euros on revenue. The volume of products with higher added value declined by 1.6 percent (exclusive of the acquisition of Engro Foods) and the volume of basic products rose by 1.2 percent.
On balance, this had a negative mix effect of -1.0 percent on revenue. Butter products displayed the highest price increases due to the increased global demand for butter and cream products with a declining supply, says the company.
The operating profit increased by 7.8 percent to 275 million euros over the first half of 2017. Currency translation effects had a negative effect of 13 million euros on the operating profit.
The gross margin increased by 8.2 percent to 1 billion euros due to the fact that the higher sales prices compensated for the increased costs. The cost of goods sold increased by 11.2 percent to 5.1 billion euros. This is mainly due to the higher guaranteed price for raw milk and the increased prices for other raw materials. (www.foodingredientsfirst.com)
