Dairy giant FrieslandCampina saw its sales decrease in the first half of 2024, but a significant reorganisation led the Dutch company to report a substantial increase in profits.
Reduced volumes
Lower milk prices, adverse exchange rate effects and a lower volume sold lowered FrieslandCampina’s net revenue by 6.7% to 6.4 billion euros. Excluding currency impacts, the revenue decline would have been 2.9 %. FrieslandCampina processed 4.7 billion kilograms of milk from its members, a drop by 3.2 %.
Despite this, the company achieved a significant improvement in operating profit, from 47 to 301 million euros. Net profit also rose sharply, from 8 to 183 million euros. For the entire year of 2023, FrieslandCampina had even reported a net loss of 149 million euros.
Major restructuring
The profit growth is attributed to an improved product mix, reduced stocks and a strict focus on costs under the ‘Expedition 2030’ strategy. Early last year, the company closed one its its cheese factories and eliminated 1,800 jobs as part of a restructuring, with about half of the Dutch positions affected.
FrieslandCampina aims to further optimise its production processes and expand its milk processing capacity. At the end of last year, the dairy producer announced a significant merger with Belgian Milcobel. CEO Jan Derck van Karnebeek stated that while the company remains vigilant about economic uncertainties and market volatility, it is confident in its strategic direction.
