Dutch dairy company FrieslandCampina is reporting a 16.7% decrease in profit for the first half of 2016, but said that world milk supply is set to decrease.
Half-year results show that the company has been challenged by the deterioration in global dairy markets.
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Milk prices have bottomed out, according to FrieslandCampina, as world milk supply is set to decrease in the second half of 2016. Demand is expected to only show modest increases in the second half of the year. The Dutch processor is putting this down to weak purchasing power in oil economies.
FrieslandCampina milk price fell by 17% in the first half of 2016 to just over 0.30c/kg compared with 0.36c/kg in the first half of 2015.
Half-year results so far show that the company has been challenged by the deterioration in global dairy markets. Revenues are down by 2% to €5.5bn but half-year profits fell by 17% to €160m. Currency headwinds negatively affected performance by €27m as the euro hardened against a basket of major currencies.
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“FrieslandCampina is doing well in Asia with ingredients, realising a fine 2.3% growth in volume with added value products,” said Roelof Joosten, CEO of Royal FrieslandCampina. “Due to the increased milk production, we had to process significantly higher volumes of milk into basic dairy products that we could not sell at a profit in the market. This is visible in the 17% in both profits and milk price for the member dairy farmers.”
FrieslandCampina will make an interim payout to farmers of €1.17/100kg of milk, which will total just over €64.2m, an average of €3,370/supplier. Milk supply for the first six months of 2016 increased by 12% to 5.5bn litres.
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Title: Milk prices have bottomed out – FrieslandCampina
Dutch dairy company FrieslandCampina is reporting a 16.7% decrease in profit for the first half of 2016, but said that world milk supply is set to decrease.
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Milk prices have bottomed out, according to FrieslandCampina, as world milk supply is set to decrease in the second half of 2016. Demand is expected to only show modest increases in the second half of the year. The Dutch processor is putting this down to weak purchasing power in oil economies.
FrieslandCampina milk price fell by 17% in the first half of 2016 to just over 0.30c/kg compared with 0.36c/kg in the first half of 2015.
Half-year results so far show that the company has been challenged by the deterioration in global dairy markets. Revenues are down by 2% to €5.5bn but half-year profits fell by 17% to €160m. Currency headwinds negatively affected performance by €27m as the euro hardened against a basket of major currencies.
“FrieslandCampina is doing well in Asia with ingredients, realising a fine 2.3% growth in volume with added value products,” said Roelof Joosten, CEO of Royal FrieslandCampina. “Due to the increased milk production, we had to process significantly higher volumes of milk into basic dairy products that we could not sell at a profit in the market. This is visible in the 17% in both profits and milk price for the member dairy farmers.”
FrieslandCampina will make an interim payout to farmers of €1.17/100kg of milk, which will total just over €64.2m, an average of €3,370/supplier. Milk supply for the first six months of 2016 increased by 12% to 5.5bn litres.
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