Tulip losses 'dragging down' Danish Crown
23rd Nov 2018 / By Alistair Driver
Tulip recorded further heavy losses in 2017/18 and is ‘dragging down’ parent company Danish Crown’s results, prompting an ongoing cost-cutting exercise at the UK pork processor.
More than 150 jobs have been lost at the company over the past few months and further cuts to remove more than £20m in costs within the company will be implemented over the next year or so.
Danish Crown’s total profits fell by 151 million DKK to 1.361bn DKK (about £161 million) in 2018, according to the latest financial statement from the Danish meat giant. This was partly due to revenue falls on the back of declining pork and beef prices across its global companies.
But Danish Crown pinned most of the blame squarely on Tulip. While much of the Danish parent company’s business is performing well, continued losses in its UK pork processing company have forced it to postpone its strategic target by two years. “It is primarily Tulip Ltd that is dragging down the results,” Danish Crown said.
Tulip actually returned a profit on ordinary operations for the first quarter of the fiscal year, but, overall, a net operating loss of 260m DKK (£31m) has been posted for the year against a loss of 231m DKK (£27.4m) last year.
Danish Crown CEO Jais Valeur said a detailed review and analysis of Tulip Ltd has revealed that it has been ‘unable to fully optimise our UK supply chain, while operating costs are far too high’.
“We have therefore launched a comprehensive cost-cutting plan, and in the past two months we had to say goodbye to more than 150 salaried employees in the UK business. Altogether, we expect to reduce costs by more than 200m DKK (£24m) from the 2018/19 financial year,” he said.
For more on this story, see Pig World