Danish dairy firm Arla has said that it expects full-year revenue to come in at between €13.4 billion and €13.9 billion, despite seeing first-half sales decline, year-on-year.
The group's full-year forecast is higher than previously stated (€13.2 billion to €13.7 billion), with Arla citing 'strong market momentum' and a positive trend in consumer purchasing power.
Arla reported sales of €6.6 billion in the first half of its 2024 financial year, down from €7.07 billion in the first half of 2023, however its strategic brands portfolio, which includes Lurpak, Puck and Arla, put in a stronger performance in the period, seeing volumes grow by 7.9%, 4.4% and 3.8% respectively.
Overall, Arla's strategic brands reported a volume-driven revenue increase of 4.1% in the first half of the year compared to a decrease of 6.0% the first half of 2023.
”We are satisfied that the momentum created by our farmer owners and employees in 2023 has continued into 2024, and today Arla is able to announce a robust half year result with a competitive milk price that paves the way for enhanced sustainability efforts going forward,” commented Peder Tuborgh, CEO, Arla Foods.
Milk Price
Arla's performance has enabled the company to increase the milk price by €0.05 per kilogram compared to the second half of 2023. Additionally, as anticipated, Arla will pay a half-year supplementary payment to its farmer owners of €0.01 per kilogram of milk, based on the volumes produced during the first half of the year.
“We are very pleased to deliver a competitive milk price," added Torben Dahl Nyholm, CFO, Arla Foods. "At the same time, the return to branded growth happened with a higher magnitude than expected due to the strength of our brands and successful efforts to regain growth, so we are on a positive trajectory."
Market Volatility
Looking ahead to the remainder of the year, Arla said that it expects market volatility to persist due to ongoing 'geopolitical tensions and uncertainty'.
However, the company is optimistic that the increase in purchasing power seen in the first half of the year will continue, particularly in Europe, as inflationary pressures ease and wages rise. This is expected to lead to a sustained increase in demand for dairy products, it noted.
