Business
Danish Crown satisfied with results despite zero growth
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November 19th, 2014
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Worsening diplomatic relations with Russia and a pork virus in the US are to blame for static results, says the company
Danish Crown has revealed its financial results for the fiscal year, and despite reporting zero growth overall and unsatisfying sales within Denmark, the firm is satisfied with what it termed 'robust' results.
The company reported a turnover of 58 billion kroner for the year 2013/14, which is only slightly less compared with last year. Its operating profit also dropped from just over 2 billion kroner to 1.9 billion kroner.
For a company accustomed to seeing increased profit margins year upon year, these results would appear lukewarm at best, but not if you ask Danish Crown.
To them, it's all about perspective. The company said that the ongoing political crisis between Russia and the West and its subsequent boycott of European products is having a direct impact on its bottom line.
"Danish pig farmers were looking forward to decent results this year, but the Russian boycott has had a negative effect on the agrarian economy," commented chairman of Danish Crown's board of directors, in a statement.
"Despite these challenges, Danish Crown has managed to maintain a similar income level as last year while keeping expenses at a minimum. I therefore think that we can be satisfied with our financial results."
Internationally, a deadly virus affecting piglets in the US led to a reduction in pork products, causing a seismic shift in the company's overall markets.
READ MORE: Danish Crown lays off 472 employees
Danish results not good enough
According to Danish Crown Group CEO Kjeld Johannesen, operating within such turbulent markets while maintaining a similar income level to last year is a testament to Danish Crown's business model and its global spread.
He conceded however, that results from sales within Denmark have been less than satisfactory – where mass redundancies are commonplace – and it is only the company's global structure which enabled its 'robust' results.
For example, in Europe, the full acquisition of Polish company Sokolów substantially boosted the operating income of DC Foods.
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