Satisfactory profits for DLG’s Danish business

DLG, Agribusiness Danmark delivers an operating profit (EBITDA) of EUR 58.7 million. The Danish activities of feed and crop cultivation all showed improvement in profits. The only exception was the grain business. New business models give hope for further growth in the future years.

DLG's Danish activities within Agribusiness Danmark had a revenue in 2018 of EUR 1.81 billion at level with the previous year and an operating profit (EBITDA) of EUR 58.7 million. Revenue and earnings have been achieved despite having significantly smaller amounts of crops to work with. COO of the DLG Group, Ole Christensen says:

“The harvest in Denmark was historically small, which of course has been a challenge for many of our owners, customers and thus also DLG. It is primarily revenue from crop handling that has influenced the accounts. However, it is important to point out that our customers have saved this normally significant cost. Our other Agribusiness activities have had a great year and even better than expected. We have thus succeeded in expanding our market share within feed solutions and crop production.”

Withstands low harvest

The harvest in Denmark is estimated at around 6.6 million tonnes against a record large harvest at 9.5 million tonnes in 2017. For the first time since 2004, Denmark has been a net importer of crops. Ole Christensen says:

“The weather is a natural risk for the agricultural industry. It is very positive that DLG could withstand the low harvest and yet deliver a sound result. Therefore 2018 must be considered as a satisfactory year. The result is clear evidence that the hard work to reduce our costs, and streamline and optimise the business over the past five years is now beginning to have an impact. We maintain our strong position in the Danish market and look forward to continued growth.”

Europe’s largest hatchery group Danhatch (day-old chickens), of which DLG owns 50%, continues its growth outside Denmark with the acquisition of four French hatcheries in 2018. More than 400 million chickens are hatched each year. The operating profit (EBITDA) in the hatchery division was EUR 12.6 million.

The Danæg Group, of which DLG owns 50% together with Danæg’s Danish cooperative members, yielded a record operating profit (EBITDA) of EUR 9.6 million compared with EUR 8.4 million in 2017. The profits are primarily generated through Danæg’s product companies.

Outlook on 2019

“The small harvest may still pose some challenges in the first half of 2019, but we still expect to be able to deliver a sound result based on significantly larger areas sown with winter seed and a large number of new initiatives. We are continuing the positive development within e.g. digitisation and have launched new initiatives to cover risk management of the farmer’s feed solutions and grain availability,” says Ole Christensen.

”Our Agribusiness area is competitive and in good shape. There are many positive measures and we are well equipped. Among other things, our investment of port facilities in Fredericia and Masnedø, which are ready for harvest in 2019. At the same time, we look forward to improving the economic conditions for agriculture in 2019, which is an important prerequisite for our owners and for DLG to continue to grow.”