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Arla beginning to profit from 2012 mergers

Arla beginning to profit from 2012 mergers

Dairy giant Arla has announced that its profits doubled for the first half of the financial year, amid the news that the two mergers undertaken by the company have begun to pay off.

The company announced revenues of £4.12 billion for the six months ending June 30th, a significant improvement on the £3.45 billion recorded for the same period last year.

Meanwhile, net profit during that period was doubled to £121 million, leaving it firmly in line with the expectations of many analysts.

Chief executive Peder Tuborgh said: "Arla has delivered a strong performance in a global market which, generally, has been characterised by higher prices due to milk production being unable to match the growth in demand.

"We have strictly adhered to our corporate strategy both inside and outside Europe, and in the first half of 2013 this has enabled us to increase the milk price paid to our owners three times, which has increased earnings for farmers."

Arla announced a merger with German processing co-operative Milch-Union Hocheifel, as well as UK company Milk Link in May last year, a move that made it the largest dairy company in the UK and the third-largest in Germany.

The firm has already heralded such moves as making a positive difference on its financial results, with a greater level of production efficiency and enhanced product portfolios.

"The process of integrating the companies with which we have merged is progressing faster than expected, and the positive results that we intended are now beginning to be realised," said Arla's chief financial officer Frederik Lotz.

It said that it had seen an increase in sales within areas such as the Middle East, Africa, Russia and China, as well as with third-party manufacturers within the global dairy industry via milk powder products and ingredients customers.

The company now expects its results for the full year to be very favourable, predicting revenues of £8.42 billion and profit of £254 million.


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