Dutch dairy cooperative Royal FrieslandCampina has reported that its profit for the first half of 2012 increased 8.7% to EUR138m, up from EUR127m in 2011, helped by volume growth and focus on international operations.
Revenues increased 7.6% to €5.08bn, compared with €4.73bn in 2011, due to higher sales prices, volume growth, and the impact of currency translation.
The company noted that most of the volume growth was seen in infant & toddler nutrition segment, as well as in the dairy-based beverage category, especially in Asia.
Royal FrieslandCampina CEO Cees 't Hart said the company posted higher revenue and profits despite challenging market conditions in Europe and rapid decline in the market prices for butter and milk powder.
"In part due to this the guaranteed price of milk from the member dairy farmers was less than in the first half of 2011," Hart added.
After excluding €15m cost of meadow milk premium (the company pays €0.30 per 100 kilos of milk to farmers who put their cows out to pasture), operating profit increased by 3.3% to €217m.
For the rest of 2012, the company said that the economic outlook remains uncertain, and the worldwide supply of milk could be under pressure due to drought in the US, low milk production in EU, and rising animal feed prices. However, the global level dairy product consumption is expected to increase due to demand in emerging markets.
