Dutch dairy giant FrieslandCampina has reported a near 18% increase in operating profits for its 2015 financial year to €576m. Operating margins expanded by 80 bps to 5.1% due to reduced raw material costs, including the lower price of milk, coupled with a better sales mix with more revenue generated from higher added-value products.

Revenues for the year were back by less than 1% to €11.3bn, while overall group profit for the year increased by more than 13% to €343m. The group’s net debt position at year end stood at €1.1bn, a near 13% year-on-year increase.

Friesland said it processed more than 10bn litres of milk last year taken in from its more than 13,500 dairy farmer suppliers. The group’s average milk price paid out in 2015 was €34.64/100kg or an equivalent of 36c/litre.

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Friesland chief executive Roelof Joosten described 2015 as an “exceptional year” for the global dairy sector given the uncertainty in markets. He added that despite the uncertainty, Friesland performed strongly in 2015 which would allow the company to offset the reduction in milk prices paid to its dairy farmer members.

Joosten added that Friesland had invested more than €3bn in the business infrastructure, particularly in terms of milk processing capacity. However, despite the added capacity Friesland temporarily had insufficient capacity at the end of 2015 and the beginning of 2016 reflecting the substantial increase in dairy output from Dutch dairy farmers since quotas were lifted.