Danish dairy giant Arla Foods has posted a steep fall in first-half profits after turnover dropped by almost DKK2bn (US$381.9m).

Turnover fell to DKK22.32bn in the six months to the end of June, down from DKK24.99bn booked during the comparable period of last year.

The company attributed DKK1.7bn of the decline to the fall in exchange rates between the Swedish and Danish krona and sterling.

However, the group added, pressure on earnings has been “significant” in the dairy industry, which is contending with price pressure due to the global recession and an imbalance between supply and demand.

Net profit slumped from DKK481m in the first half of 2008 to DKK263m this year.

Arla said the majority of savings from its DKK1bn cost-cutting programme will be seen in the second half of the year. and the group retained its DKK900m full-year profit forecast.

For the full press release click here, or check back later for just-food’s more in depth analysis of Arla’s first half.