Danish Crown gives the listings a significant boost
Starting on May 5th, Danish Crown will raise the payment for all unitholders' deliveries of slaughter animals by DKK 1.60. For pigs, this means that the price will increase from DKK 12 to DKK 13.60 per kilo. This is happening for several reasons.
Firstly, earnings have generally improved. Secondly, sales prices for both pork and beef are increasing, and finally, Danish Crown's board of directors has decided to aim for a residual payment for all slaughter animals of at least 70 øre per kilo, rather than one krone in the financial year 2024/25. The latter is done out of a desire to strengthen the liquidity of the unit owners.
"First and foremost, this is a change in the way we settle for slaughter animals. We need to get the money out to the owners faster, so they have the liquidity to fill their barns with pigs and cattle for our slaughterhouses. But that alone is not enough to give the quotes such a big boost. Our ongoing earnings have also improved and, not least, we get better prices for our goods", says Niels Duedahl, Group CEO at Danish Crown. He continues:
"Going forward, we will strive to continuously send as much as possible to our owners through the listing. Therefore, the remaining payment will naturally be lower in the future, and the specific level will depend on our financial strength and overall competitiveness from year to year".
In the autumn, Danish Crown decided to implement a comprehensive cost-cutting plan, which included the elimination of 500 white-collar positions and a major effort to get a handle on a number of loss-making activities.
The trend has since turned around in Danish Crown's German business, which is no longer making a loss. A processing plant in China has been closed down, and a conditional agreement has been reached to sell the plant. At the same time, progress is being made with the commissioning of a new bacon plant in England, so overall the trend has turned around.
"We have always said that we are ready to turn all the levers to turn the tide. Now we can see that we have succeeded in improving earnings, even though we are actually slaughtering fewer pigs. This development should benefit our owners. However, I would like to emphasize that even though we are now taking a big step forward, we are not finished. We can and must continue to improve our earnings, but we are in a better place than we were six months ago", says Niels Duedahl.
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