Dairy gains benefit Chr Hansen in Q2

Related tags Chr hansen United states dollar Middle east

Ongoing growth in cultures sales to the dairy industry and health
markets helped the Danish ingredients firm Chr Hansen post a modest
rise in revenue for the food ingredients division in the first six
months. Organic growth for the group rose 5 per cent with net
profit growing to DKK 27 million (€3.63m).

"In Europe sales of cultures and human health products continued to show very good growth, and sales of colours and flavours also increased,"​ said the Danish firm yesterday.

Revenue in Europe reached DKK793m showing single digit growth of 7 per cent.

The figures are a considerable improvement on first quarter results announced in January this year that revealed the impact of economic downturn in most of the company's markets, and the tough dollar exchange rate. Sales in the ingredients business fell 4 per cent on the comparable period to DKK 836 million while operating profit was down to DKK106 million, a decline of 16 per cent on the 2003 first quarter.

Probiotics represent a substantial part of the overall cultures business and continuing consumer interest in functional dairy products drove sales in most geographical zones - North America, Asia and the Middle East - for the world's number two cultures supplier.

In February this year Chr Hansen was knocked off the number one cultures slot when Danish ingredients firm Danisco acquired the leading supplier of probiotics French firm Rhodia in a €250million deal.

"Chr Hansen is the number one in most culture areas and Rhodia was our biggest competitor. Now we will be head-to-head with Danisco,"​ Jose A. Moreno, director of investor relations at Chr Hansen told FoodNavigator.com at the time.

"We didn't think that we could add value to our shareholders by acquiring Rhodia,"​ he added, stressing the fact that customers prefer a couple of suppliers. In other words, rolling number one and number two positions into one entity could not be advantageous.

Looking ahead to the rest of 2004, Chr Hansen said it was on the way to achieving expected profit from ordinary activities before tax of DKK 115-145 million.

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