Arla Foods has insisted it is “on track” to meet its full-year target for operating profits despite a fall in earnings in the first half of 2011.
The Danish-Swedish co-operative posted a profit of DKK497m (US$95m) for the first six months of the year, a fall from the same period in 2010, when profit hit DKK697m. Operating profit dropped 38.4% to DKK608m.
However, an Arla spokesperson said today (2 September) that the company’s lower first-half operating profit gives a misleading snapshot of the company’s finances.
He said: “Being a co-operative, [Arla] is different to most companies as we pay out our operating profit to our farmers.
“Interim results wouldn’t necessarily give the full picture. We have a fixed goal for our end-of-year result, and that is to reach DKK1.3bn in [operating] profit and also improve earnings for the farmers along the way, which we are still on track to meet.”
Arla’s first-half revenue increased 12% to DKK26.66bn, which the company put down to growth in its core markets. It cited Germany, where Arla merged with local co-op Hansa Milch earlier this year.
CEO Peder Tuborgh also pointed to Arla’s growth outside Europe. “While consumers in our key European markets are still exercising restraint due to the new economic crisis, we can note strong growth in our international markets, especially in the Middle East and North Africa, where revenue rose by 18 per cent,” he said.