The company reported an operating profit of DKK1.995 million for the 2013-14 financial year, down from DKK 2.0 million posted in the comparable year-ago period. Revenues were flat at DKK 58 billion. In the company's view, the results are positive given the ongoing political conflict between Russia and the West and Russia's ban on European products has dragged on the company's financial performance.
“The past year has been very challenging due to the situation in Russia, and it is having an impact on our owners,” said Erik Bredholt, chairman of Danish Crown’s board of directors. “For the slaughter pig producers, the year started with high hopes for reasonable earnings. However, the situation in Russia has meant a dramatic fall in the quotation in the course of the year, which is having extreme financial repercussions for farmers.
“Despite the considerable challenges thrown up by Russia’s ban on first pork and then basically all EU foods, we have maintained earnings in the group,” he added. “At the same time, we have successfully kept costs under control, so I think we should be satisfied with the results.”
In addition to political problems, the balance of pork production has shifted internationally due to declining pork production in the United States. Spread of the porcine epidemic diarrhea virus killed millions of piglets.
“When global markets are affected to this extent, it increases the risk of being wrong-footed,” said Kjeld Johannesen, Danish Crown Group CEO. “I therefore see the results for the year as confirmation of the strength of the Danish Crown Group’s business model with the role it plays in large parts of the value chain and its significant geographical spread.”
Johannesen acknowledged that earnings from Danish slaughterhouses remain unsatisfactory. However, Danish Crown's international structure more than offset pork production challenges in the US. DC Foods' European processing companies have been strengthened by its acquisition of the remaining shares of Soko?ów, a Polish company.
“We are now guaranteed full access to the Polish market, and our efforts to create synergies across the group look promising within all business areas,” he said.
