Dairy cooperative Arla will pay out the entire net profit for last year to its farmer owners, totalling over £252 million.
Arla’s Board of Directors have proposed a pay-out of the full net profit for 2018 of EUR 290 million (£252m) to its 2,400 British farmer owners.
This will be paid out as 2.3 eurocent per kilogram (2 pence per litre) of milk each farmer owner has delivered to the cooperative.
It comes after a difficult Q1 2018 for the dairy giant. However, it came out of 2018 with improved sales and brand share as the company’s performance grew stronger throughout the year.
Group revenue increased to EUR 10.4 billion (£9bn), compared to EUR 10.3 billion in 2017 and EUR 9.6 billion (£8.3bn) in 2016, driven mainly by strong growth in branded sales volumes of 3.1 per cent with a wider range of dairy products to meet consumer needs.
Arla grew its share of branded business to 45.2 per cent, surpassing its long-term target in the Good Growth Strategy 2020 of 45 per cent.
The cooperative's performance price – which measures the value Arla creates per kilogram of owner milk – rebounded after the first quarter and improved throughout the year, ending at a full-year average of 36.4 for 2018.
By the end of 2018, the negative impact of the summer’s drought in Europe was registered as expected growth in milk volumes stalled in Europe, and Arla’s farmers faced increasing feed prices.
Arla Foods Chairman, Jan Toft Nørgaard said: “As a farmer-owned dairy company we care deeply about the livelihood of our farmers and we see how many of our colleagues have been affected by the drought last summer.
“We have this exceptional opportunity to help them without putting our company Arla at risk and I am proud that we have proposed to do so.”
It follows news of Arla's milk price for March 2019 remaining unchanged, with the manufacturing price per litre staying at 30.24 pence from 1 March 2019.
