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Denmark’s Arla Profit Rises Helped By Lurpak Sales, Cost Savings

Denmark’s Arla Profit Rises Helped By Lurpak Sales, Cost Savings

(Bloomberg) --

Arla Foods Amba, the largest dairy company in the Nordic region, said net profit rose 7% last year, helped by lower costs and higher sales in branded products such as Lurpak butter.

Net profit rose to 311 million euros ($336 million), from 290 million euros in 2018, Arla said in a statement on Wednesday.

The dairy farmer cooperative, which is based in western Denmark, launched the biggest cost-cutting plan in its history two years ago in an effort to tackle currency loses linked to Brexit and falling prices for protein and fat products. On Wednesday, Arla said the plan is progressing faster than expected and that it had achieved savings of 111 million euros in 2019, beating the top end of its targeted range of 75-110 million euros.

Still, Arla said that the U.K.’s exit from the European Union “continues to be a risk” as potential tariffs would increase costs. Revenue may not improve this year, with Arla forecasting sales of 10.4-10.8 billion euros.

These were some of the other highlights from Arla’s 2019 earnings report:

  • 2019 revenue grew to 10.5 billion euros, from 10.4 billion euros in 2018
  • Earnings before interest and tax rose to 406 million euros, from 404 million euros
  • Profit before tax rose to 347 million euros, from 342 million euros
  • Sales of Lurpak butter increased to 588 million euros, from 561 million euros

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Nick Rigillo

©2020 Bloomberg L.P.