Arla Foods has booked profits ahead of budget boosted by cost cuts and rising prices for bulk industrial products.
The Danish group’s profits for 2009 totalled DKK971m (US$176.9m), DKK71m higher than the firm’s budget, exceeding the expectations of the business, Arla said yesterday (23 February).
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Despite profit being ahead of expectations, Arla’s turnover was “significantly dented”, the company conceded, as customers and consumers reacted to the global recession and bought fewer and lower-priced dairy products.
As a result, Arla said it was forced to cut the milk price to its owners dramatically.
“2009 was a seriously tough year for our owners and their overall return per kilogramme of milk – DKK2.14 – is not high enough,” said Arla Foods CEO Peder Tuborgh.
“The recession was fast and deep, but didn’t bring the business to a halt. We’ve shown that we can react quickly. We identified extraordinary savings that provided immediate liquidity. 2009 has also been a difficult year for employees with cutbacks and redundancies. The savings, however, were necessary and we avoided a further reduction in the milk price. That’s the reaction of a strong organisation.”
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