Arla Foods posts first half 2017 revenue of 5 billion euros

Arla Foods’ revenue grew by 3.4% to €5 billion for its first half 2017 results, up from €4.85 billion in the corresponding period last year, despite reduced total milk volumes from farms and adverse currency developments.

The company said that while milk volumes reduced from 7.2 billion kg last year, compared to 7 billion kg in the first half of 2017, the company were encouraged by global milk prices showing a ‘much-needed recovery’ after nearly three years of lows prices in the industry.  

This was a direct result of lower to unchanged milk production against the prior year in most dairy-producing markets combined with improved demand for milk and dairy products in Europe, the US, and emerging markets, the company said.

Arla Foods chief executive officer Peder Tuborgh said: “As the global dairy market improved, we have responded to the sustained rally in global dairy prices while continually improving our product mix across key markets. As a result, we have increased the prepaid milk price to the farmers who own our company by 42% over the last 12 months. They needed that, as the past two and a half years have been tough for most dairy farmers around the world.” 

It is Arla’s strategic ambition to substantially expand its sales outside Europe, specifically in the  Middle East, North Africa, China and Southeast Asia. Arla’s international business grew 10% to €792 million for the first half of the year – primarily driven by strong performance in sub-saharan Africa, which was up 32% and the regions of China and Southeast Asia which saw increase of 36%.

Elsewhere, Arla Foods Ingredients reported a 24% revenue growth in the first half of 2017 to €313 million, compared to €252 million in the first half of 2016.

“Our natural whey ingredients business remains the most profitable part of the Arla Group,” added Tuborgh. “We continue to take lead and invest in technology that sets the industry standard for quality, innovation and food safety. I expect this business to continue its high growth rates throughout the rest of the year through strong performance in value-added protein ingredients for the child nutrition and medical nutrition markets.”

Arla expects to achieve its full year targets for profits, strategic branded growth and financial leverage, along with further improvements in the performance price and a full year group revenue increase of €1 billion.