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DMK Group: Earnings stood at 13.2 million euros, down from the previous year

Germany 26.06.2024
Source: The DairyNews
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2023 was a challenging year for the DMK Group, marked by market disruptions and negative one-off effects that led to unsatisfactory annual results. The average milk price for the year fell short compared to competitors. Despite these setbacks, DMK Group remains in a solid position in terms of its overall balance sheet.
DMK Group: Earnings stood at 13.2 million euros, down from the previous year
The reasons for the lower-than-expected 2023 results are multifaceted: extreme market distortions led to significant devaluations of stocks, particularly for cheese. Additionally, lower demand in the white and yellow product lines resulted in excess volume being processed into lower-quality products like powder. Higher energy costs, due to necessary long-term contracts, also impacted the results. "You grow with challenges and can learn a lot from them—despite the difficulties," said Ingo Müller, CEO of the DMK Group. "We have started analyzing our performance and implemented countermeasures in 2023, which are already showing positive effects. Since then, milk prices have been on the rise, and we are working towards our 2024 target of paying a competitive milk price."

Key figures from the past financial year reflect the impact of these challenges: DMK paid its farmers an annual average of 41.1 cents per liter, a high level in a multi-year comparison but below the competition's average for 2023. Earnings stood at 13.2 million euros, down from the previous year, while turnover remained steady at 5.5 billion euros. Despite the turbulence, DMK's financial position remains strong, with the equity ratio rising from 31.3% to 34.7% in 2023.

Looking ahead to 2024, the milk market has stabilized with more normalized supply and demand dynamics. A more stable price level is anticipated, offering a positive outlook for the remainder of the year, though past volatility suggests ongoing caution. The "Strategy 2030" initiative aims to strengthen and expand high-value product lines while reducing lower-return products. This strategy includes the decision to reduce capacity at four DMK sites by early 2025, a move necessary to strengthen the company's future position and other operational sites.

With the launch of "Strategy 2030" in 2019, the DMK Group has undergone a significant transformation affecting all areas of the company. "Compared to before, DMK now has a clear identity," says Müller.

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