Danish oil and fat ingredients company Aarhus Oliefabrik fell in line with market expectations this week when it reported a post-tax profit of DKK 166 million (€22.3m). In the third quarter of 2001 the company had predicted a profit of between DKK 155 and 175 million.
Earlier initiatives carried out last year by Aarhus to focus on the core activity of vegetable oils appear to have paid off. Within this area companies in Denmark, UK, USA and Mexico have together generated operating income of DKK 244 million, equivalent to 86 per cent of the group's consolidated operating income.
In 2001, the consolidated operating income totalled DKK 284 million, a significant leap from the DKK 209 million figure in 2000. However two principal factors explain this figure difference. Firstly, a non-recurring income of DKK 48 million from the sale of shares in the company's Norwegian subsidiary Maritex and secondly, the sale of real property in Denmark. Both were included in the 2001 results.
Observations made by Aarhus regarding the market situation include: the rising world market prices for all vegetable oils during the second half of 2001; heavy increases in cocoa and shea prices following a poor harvest in West Africa; margin pressure on bulk oils due to severe competition; and special chocolate fats approved in Australia and New Zealand following their approval in 2000 by the EU, where work continues to settle national legislation.
On a less positive note the group reported that total costs for the group increased by DKK 147 million in comparison to 2000. According to Aarhus, the rise is largely due to UK subsidiary Anglia Oils that last year acquired Rowallan Creamery.
Share prices in Aarhus increased from DKK 180 at year-start to DKK 248 at year-end 2001.