NETHERLANDS: Commodity prices push up Friesland profits
Friesland Foods, the Dutch dairy group, saw profits jump 16% last year as revenues from its dairy ingredients business rose on the back of higher commodity prices.
The company booked a 16% rise in operating profit to EUR299m (US458.3m). Revenue climbed 8.5% to EUR5.1bn.
Friesland said the jump in profit came from the rising price of cheese milk powders and ingredients during 2007. Revenues were helped by the prices Friesland could command for its dairy commodities.
In Europe, revenue rose 8% to EUR3.9bn as Friesland won higher prices for products on sale in the Netherlands.
However, Friesland has a significant presence in central Europe, Asia and Africa and the company said that it was unable to pass on the rise in dairy prices to its customers, which led to pressure on margins.
In Asia, revenue rose 12% to EUR977m, although operating profit fell 14% as Friesland was unable to increase prices to cover rising input costs.
Friesland's board refused to give any forecast on its financial performance this year. The company said that pressure on margins would stay "strong", particularly in Asia and Africa, as a result of the high cost of raw materials.
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