News Dairy

Farmel reports slowly better results after challenging years

April 30, 2024 - Klaas van der Horst

Farmel Holding is gradually regaining stability, as evidenced by the company's figures for 2023. Particularly, the dairy trading arm, Farmel itself, is showing clear positive results again. However, subsidiary company Veco still has some work to do. The recovery there is hindered, among other factors, by shortages of skilled personnel.

The previous two fiscal years, 2021 and 2022, were challenging for Farmel Holding. Not only were losses incurred, but reserves were also depleted due to various setbacks. Last year, Farmel managed to bounce back. Results improved, repayments were successful, cash flow increased, and overall, the company became slightly more financially stable. For the current year, 2024, Farmel anticipates further improvements in results.

Operational Growth: The holding's revenue for 2023 amounted to €553 million. This is significantly less than the €727 million booked in 2022, primarily due to decreased dairy prices. However, the operational result improved significantly, as it shifted from a loss of €5.5 million to a slight positive of over €1.1 million. The consolidated net result amounted to a negative €1.9 million.

Veco: This was mainly due to a more challenging recovery at Veco Dairy, which was acquired in 2021. While this fresh dairy producer managed to increase revenue, it still struggled to operate as planned. This was due, in part, to shortages of skilled personnel and underutilized capacity. As a result, this business still incurred a loss of €4.2 million.

Dairy Trading: In contrast, there was a positive result of €3.8 million at dairy trading arm, Farmel. The operational result even reached over €6 million, with a revenue of €490 million. Over half of this revenue was generated outside of the Netherlands. Meanwhile, several activities were halted or divested in the past year, such as Farmel Agricultural Advisory. Lastly, Farmel expects to collect 10% more milk from its own suppliers in the Netherlands and Belgium this year.

Klaas van der Horst

Klaas van der Horst is a senior market specialist in dairy at DCA Market Intelligence. He also closely monitors developments in politics and agricultural policy.