(AOF) – Fleury Michon has unveiled degraded accounts, marked by rising production costs. The food group suffered a net loss of 2.5 million euros as of June 30 against a profit of 3.6 million euros a year earlier. Fleury Michon posted a current operating loss of 4.2% against a profit of 6.7 million euros in the first half of 2021. The current operating margin fell from 2.0% to -1.1%, “strongly impacted by the general increase in production costs, mainly raw materials, packaging and energy”.
This increase “could not be passed on in the selling prices during the first half of the year”.
Fleury Michon recorded an increase in turnover of 9.6% to 374.50 euros.
“In the short term, the rise in energy costs is an additional factor of uncertainty, which the Fleury Michon teams are constantly monitoring in order to limit consumption in a responsible manner”, indicated the agrifood group about its prospects.
Following the economic context, negotiations were reopened with our distributor customers from April 2022. “Rate increases have been negotiated from July 1, 2022 but will only partially cover the cost increase to date,” specified Fleury Michon. Given the persistent volatility of the markets, no quantified outlook for the 2022 landing has been communicated to date.
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Development of the Chinese dairy industry
The Chinese government encourages the consumption of dairy products to improve the nutrition and immune defenses of the population, while seeking to reduce the country’s dependence on imports. Wishing to turn the page on the melamine infant milk scandal, which affected 300,000 babies in 2008, milk production is picking up again in the country, after ten years of stagnation. The big industrial groups (Mengniu, Yili, Youran or Modern Dairy) do not export and concentrate on a domestic market, which is growing by 4 to 5% per year. They develop very large farms and rely heavily on innovation, investing four times more than all their competitors in the world.