According to the financial statements for the first half of 2023, the DLG Group also realised earnings before tax (EBT) of DKK 374 million compared to DKK 367 million for the prior-year period. Revenue totalled DKK 34.7 billion compared to DKK 37.2 billion in 2022, a decline that should be seen in light of a significant decrease in the general price level for grain, raw materials and energy compared to 2022.
“The results for the first half of the year are highly satisfactory. I’m pleased to note that we are yet again increasing our earnings growth in what are difficult market conditions. It is also worth noting that we’re looking at increasing overheads due to inflationary pressures, while interest expenses have increased significantly,” says Group CEO, Kristian Hundebøll, before continuing:
“ I’m very pleased that we’ve succeeded in consolidating our business further in the past year, as is clear from our financial statements. Financial ratios have improved, and equity exceeds DKK 8 billion for the first time.”
Good six months for Food and Energy
The Food business area realised earnings (EBITDA) for the first six months of DKK 551 million compared to DKK 506 million last year. The increase is driven primarily by good results from the agricultural and food-related businesses in Denmark and Sweden.
Within animal nutrition, sales of pig feed in both Denmark and Germany are still impacted by a declining market, which has again resulted in lower sales of pig feed and related raw materials.
“The current trend in the pig sector is not expected to change significantly in the second half of the year. On the other hand, other parts of our agricultural business are delivering an impressive performance, especially our grain and our egg and poultry activities,” says Kristian Hundebøll.
Our Energy business has yet again achieved impressive earnings growth, which is primarily related to the German business, Team Energie. The combined Energy business delivered earnings (EBITDA) of DKK 424 million against DKK 341 million for the first half of 2022.
“We continue to expand the market position of our large German energy business, driven in particular by our gradual expansion in western parts of Germany,” says Kristian Hundebøll.
In May, the DLG Group made a strategically important investment in Group, becoming the co-owner of this pioneering group which has great ambitions within biogas and circular energy clusters on land.
“Quite apart from strengthening the ties between agriculture and energy production, the investment not only supports our Danish business and provides our customers with new opportunities, is also a way of future-proofing agriculture. This is perfectly in line with our strategy of investing in sustainable solutions,” says Kristian Hundebøll.
Activities in the German construction sector have been declining in the first six months of the year, and this is reflected in sales of building materials in Germany. Demand has been declining, resulting in lower sales and lower profit margins. The Housing business area posted EBITDA of DKK 162 million against DKK 219 million last year.
“In recent years, our German building materials business has delivered impressive growth rates, but right now we’re seeing a slowdown in the market, partly caused by the geopolitically tumultuous situation, which is affecting the financial markets and interest rates. However, there is still a great need for both construction and renovation in Germany,” says Kristian Hundebøll.
Outlook for FY 2023
“We expect the trends that we’ve seen in the first half of the year to more or less continue in the second half. The geopolitical situation and the world economy can come to have a bearing on market developments. The harvest is getting underway, and preliminary yields have been slightly below average,” says Kristian Hundebøll.
Based on current assumptions, the annual results are expected to be in line with 2021.