Dutch dairy group Friesland Foods has reported a rise in first-half profits as the company enjoyed the benefits of rising prices for dairy commodities.

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Friesland Foods, which produces milk products and industrial ingredients for food processors, saw operating profit jump 22% to EUR145m (US$198m). Revenue rose 4.5% to EUR2.4bn.


The co-operative, one of the world’s top ten dairy producers, said higher milk powder prices had boosted its earnings. “Thanks to the upward trend in the dairy market, our member dairy farmers saw the price of their milk rise for the first time in years,” the company said.


Friesland Foods also pointed to the “strong development of the key drive brands” in its portfolio, as well as its moves to boost its presence in “enhanced nutrition”.


Such moves helped drive what Friesland Foods dubbed an “excellent performance” in Asia, where sales jumped 13% to EUR484m.

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Revenue in Europe rose 2.7% to EUR1.9bn thanks to rising milk powder and butter prices. Friesland Foods’ earnings in the region climbed 16% to EUR91m.


However, Friesland Foods took the gloss of its figures with the admission that uncertainty surrounding the impact of rising dairy costs on its customers left the company unable to issue full-year guidance for 2007.


The company said it would be “impossible to fully recharge” rising commodity costs in selling prices during the second half of the year.


“Moreover, a decline in demand from consumers due to the higher prices may lead to pressure on volumes,” Friesland Foods said.