Dairy manufacturer FrieslandCampina has managed a 3.5 % net turnover increase in the first half of 2014, but profits still dropped considerably - mainly because of negative exchange rate fluctuations.
Strong euro and high milk price
In the first half of 2014, FrieslandCampina managed a 5.713 billion euro turnover, a 3.5 % increase. Profits dropped 60 million euro to 104 million euro, a 36.6 % drop because of negative exchange rate fluctuations and lower margins.
"The combination of a strong euro, a high milk price, falling sales in a number of Asian markets and general political unrest all affected FrieslandCampina’s results during the first six months of 2014. Despite these developments, higher sales prices led to a further growth in revenue. In the consumer market, infant nutrition, which is one of our strategic growth categories, performed especially strongly", CEO Cees 't Hart said.
Alternative for Russian export
Turnover in the "Europe, Middle East and Africa" region has remained stable, but there were lower volumes, but thanks to higher prices, turnover remained level. FrieslandCampina's market share is apparently under pressure in the Netherlands, Belgium and Nigeria. Asian turnover remained pretty stable, but children's food Friso managed growth in nearly every country.
There have been no full-year forecasts, but the company has expressed the need to find alternative products and markets for the milk (for cheese) that usually gets exported to Russia. The Russian boycott removes any possible export options to that country.