(AOF) – At 112 million euros, Savencia Fromage & Dairy’s current operating profit contracted by 11% in the first half of 2023. It benefits from price increases and industrial productivity gains, but is penalized by the impact of the decline in global prices of dairy ingredients. Over this period, its net profit fell from 71 to 51 million euros in one year. At 3.37 billion euros, Savencia Fromage & Dairy’s turnover increased as of June 30, 2023 by 11.7% based on published data, including 14.4% due to organic growth.
The unfavorable exchange rate effect of 4.9% comes from the depreciation of the Argentine peso and the yuan.
Its financial situation is solid with shareholders’ equity of 1.83 billion euros and net debt excluding IFRS 16 of 600 million euros. It represents 33% of consolidated equity compared to 29% as of June 30, 2022.
On the outlook side, the group specifies that current uncertainties both on the economic and geopolitical levels should continue to impact activity in the second half of the year.
The company thus takes into account the situation of the French dairy economy characterized by a high milk price and falling prices of industrial products; the tension on consumer demand in an inflationary environment and the wait-and-see attitude of buyers of industrial products; and the continued rise in interest rates and its impact on the general economy.
AOF – LEARN MORE
Learn more about the Agri-food sector
Soaring energy prices and a call for help
In the past, energy represented a fixed cost of 3% of turnover. This year, this percentage rises to 5% or even 7% for VSE-SMEs, according to Ania (National Association of Food Industries. Professionals are very worried because until the end of 2022 they generally benefit from coverage to cushion these increases. However, they are not renewed for 2023 and after. Consequently, 25 of the main inter-professional organizations (Intercéales, Inaporc, Semae, etc.) are calling on the State for help in the face of the erosion of their margins and their capacity to investment.
The State has proposed several devices, including an “electricity shock absorber”, which are considered insufficient. The organizations also deplore the failure of European negotiations to achieve a price shield to avoid distortions of competition. Agriculture and agri-food demand a maximum ceiling price of €180/MWh while many companies buy at prices above €500/MWh on the French market.