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Danish dairy giant churns out profit as prices rise

A fall in global supply is among factors to have resulted in higher prices and a bigger profit margin for Danish dairy producer Arla, one of the country’s largest companies.

Danish dairy giant churns out profit as prices rise
Denmark's biggest dairy producer Arla increased turnover in the first half of 2022. Photo: Liselotte Sabroe/Ritzau Scanpix

Increased competition for milk produced by Arla’s dairy farmers has driven up prices and resulted in a turnover increase worth billions of kroner, according to the company’s results for the first half of 2022.

Arla’s turnover for the first six months of this year reached 47.5 billion kroner, compared to 40 billion kroner in the first half of 2021.

The company cited a combination of price increases, which were exacerbated by the Russian invasion of Ukraine, and disruption to global supply chains as major factors causing a fall in the amount of milk on the market.

Demand has remained the same, meanwhile, resulting in more being paid for the same milk production compared to the previous year.

Arla also sustained additional costs in 2022, including higher prices for food, fertiliser and energy, but was able to post an overall higher turnover.

The dairy company said it could see customers changing their purchasing choices in response to increasing prices.

“Particularly in Europe, consumers bought less and chose cheaper products, particularly within butter and spreadable ranges,” it said.

“Extreme volatility [in the market] at several levels makes it difficult to predict how the second half of the year will play out,” it also said.

“High costs through the production chain and no signs of increases in global milk production will continue to affect the entire year, and we expect persistently high milk prices,” it said.

READ ALSO: Danish minister vows to monitor prices to prevent ‘unfairness’

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MONEY

Exchange rate: What are your options if you live in Denmark but have income in pound sterling?

The value of the British pound has fallen steeply against the dollar in recent days but also against the Euro – and the krone. So what should you do if you live in Denmark but have income – such as a pension, rental income or a salary – in pound sterling?

Exchange rate: What are your options if you live in Denmark but have income in pound sterling?

Exchange rates might sound like a spectacularly dull topic, but if you live in Denmark (where, naturally, your day-to-day living expenses are paid in kroner) but have income from the UK in pounds, then the movement of the international currency markets will have a major impact on the money that ends up in your pocket.

This is not an uncommon situation – Denmark-based Brits may work remotely as freelancers from British companies and be paid for invoices in pounds, while retired Brits might be receiving a British pension.

Others might have income from rental properties or investments.

So a big loss in the value of the pound against the euro – and by extension, the krone – can have a major impact on Brits in Denmark.

The most recent fall in the value of the pound was sparked by the UK government’s new mini budget and has already seen a relative recovery. 

The pound-krone exchange rate over the last month. Chart: xe.com
 
 
But while this one-time fall is spectacular, it’s also part of a longer term trend in the fall of the value of the pound, especially since Brexit, that has seen people such as foreign-based pensioners lose a big chunk of their income.
The pound-krone exchange rate over the last 10 years. Graph: xe.com

So if you have income in pounds, what are your options?

Income in kroner – obviously this isn’t an option for everyone, especially pensioners, but the best way to protect against currency exchange shocks is to make sure that you’re paid in the same currency that you spend in.

Alternatively, income in euros: the advantage of the euro in Denmark is that its value is pegged to the krone and not sensitive to exchange rate fluctuations.

For those being paid from abroad, billing in euros means you could work in any EU country – including the anglophone ones like Ireland – and get your salary in euros.

Depending on your employer, it might also be possible for you to ask to bill in euros. 

Work in Denmark – if you’re currently not working or want to switch to local currency income, then an obvious option is to take up some work in Denmark.

Depending on your work and residency status, as well as the field you work, the practicality of this option ranges wildly from one person to the next.

READ ALSO: How can you get a work permit in Denmark if you are not an EU national?

Exchange rate – if your income can only be paid in pounds, it’s crucial to ensure that you get the best exchange rate possible and that you don’t waste money on international transfer fees.

The best options here are online banks or money transfer services, which compete on the rates that they offer, so usually have the most advantageous rate.

Some online banks also have the option to set up accounts in both pounds and kroner, so that you can receive money in pounds and spend it in kroner without having to make bank transfers, which can attract fees.

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