Arla Group’s first half revenues up by just 1%

Finance

Arla Group has reported a slight 1.2 per cent increase in total revenues to €5.4 billion in the first half of the year.

As a result, the company revealed it is adjusting its expectations for full year revenue to the range of €10.6 billion to €11 billion.

Despite the small increase, Arla Food UK also reported a three per cent increase in total revenues, alongside, a 33 per cent growth in e-commerce business in the first half of 2021, as a result of one third of UK shoppers buying groceries at least once a week.

Its Food Service business also saw a 21 per cent increase in boost in sales in the Spring as the hospitality sector re-opened.

READ MORE: Arla Foods announces Dale Farm partnership

The company added that its stable of licensed brands “performed well”, led by its ready to drink Starbucks portfolio, which grew by 43 per cent in volume across Europe, the Middle East and Africa.

Arla Foods Ingredients (AFI) a subsidiary owned 100 per cent by the dairy company, continued to improve the quality of business and revenue grew to €387 million compared to €360 million in the same period last year.

In early June, AFI signed a contract with the Northern Ireland dairy company Dale Farm, to supply high quality whey and secure raw material to expand its value-add business.

“The outlook remains volatile and whilst our recipe for managing Covid-19 has been successful, we must now manage the transition to the next normal just as well,” Arla chief executive officer Peder Tuborgh said.

“We expect to see a re-balancing of demand between retail and Food Service which will bring our retail sales to a more familiar level and soften our branded growth and the broad inflationary environment will continue to challenge our company and farmer owners.”

The news follows Arla’s managing director, Ash Amirahmadi saying supermarkets could face a “summer of disruption” to milk deliveries if the government does not act to address a shortage of lorry drivers.

Earlier this month Arla revealed it was unable to deliver to 600 stores due to dwindling driver numbers.

“I think when you are not able to supply 10 per cent of the stores which are expecting to get milk every day, I think that’s quite worrying for a customer walking into a store and not being able to have milk so we are taking it very seriously,” Amirahmadi said.

“We are trying to avoid a summer of disruption.”

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