Danish Crown, the Denmark-based meat co-operative, has reported a fall in half-year earnings, with new chief executive Jais Valeur pointing to pressure on retail prices.
The company posted net profit of EUR819m (US$912.8m) for the first six months of its 2015/16 financial year, compared to EUR852m a year earlier.
Danish Crown’s operating profit stood at EUR1.1bn, versus EUR1.15bn the year before.
The co-op’s revenue inched up 0.7% to EUR29.42bn.
“The retail market is extremely competitive, it is dominated by ever-larger chains, and it is characterised by an increasing focus on discount products and a constant demand from consumers for lower prices. This is putting pressure both on livestock farmers and on the prices paid to farmers in general,” Valeur, who was appointed Danish Crown’s president and CEO in January, said.
However, the former Arla Foods executive claimed Danish Crown’s results were “satisfactory” given the conditions in which the company was trading.
Announcing its results, Danish Crown said it had been facing weak demand for meat in neighbouring European markets amid an excess supply of meat.
Danish Crown said UK subsidiary Tulip had been “battling particularly strong headwinds” and underlined “targeted efforts are being made to strengthen the company’s position”.
In March, Danish Crown announced it was to axe 121 jobs at a Tulip site in the UK. Earlier this month, the co-op said it was creating 100 jobs at another Tulip site, in King Lynn in Norfolk.
Elsewhere, Danish Crown said sales in Asia were increasing and revealed its fresh meat business in the region had grown earnings.
Valuer said: “Altogether, the interim results confirm what I have been saying since taking over as president and CEO – Danish Crown is a well-managed and well-invested business. However, we are also a part of a food sector which is under pressure and undergoing rapid change. For Danish Crown to maintain its leading position in the market, we must become even better and work even harder to create value for our 8,000 owners and suppliers.”