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DLG Group sees double-digit earnings growth

Danish-based agribusiness DLG Group has reported a 12 percent increase in net earnings in 2016 compared with the previous year, despite a lower turnover.

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Danish-based agribusiness DLG Group has reported a 12 percent increase in net earnings in 2016 compared with the previous year, despite a lower turnover.

Net earnings after tax (EAT) rose to EUR77 million (US$81 million), an improvement the firm attributes to record earnings by its German subsidiaries as well as continued strong performance in Denmark and by the Vilofoss Group. The group’s subsidiaries in Germany include Team AG, HaGe AG and Deutsche Vilomix, whose contribution to earnings before tax grew by 46 percent to EUR47.3 million (US$49.9 million).

Lower overall turnover and prices for grain and energy combined to reduce DLG Group’s turnover by EUR400 million (US$422 million) from 2015 to EUR6.6 billion (US$7.0 billion). However, at EUR229 million (US$242 million), earnings before interest, tax, depreciation and amortization (EBITDA) for DLG Group in 2016 were comparable to the previous year.

“The result is due to three years of focused effort to convert DLG from a conglomerate to a dedicated agribusiness group, and we are now Europe’s largest agribusiness by volume,” said Group CEO Kristian Hundebøll. “We have realized our goal of divesting businesses that were not profitable or did not fit strategically.”

Future growth plans

Over the next five years, he added, DLG Group’s goals are to grow organically and through acquisitions within its three core business areas, and to double earnings growth compared with 2012-16.

Owned by Danish farmers, the DLG Group has become Europe’s largest agribusiness by volume. It supplies farmers with many basic requirements, including feed for poultry, pigs and cattle from its own feed mills as well as seed, fertilizer, agricultural lime, crop protection products and fuel. It is also active in retail, electricity trading and others.

The group has business interests in more than 12 countries, with a focus on the Baltic Sea region. Subsidiaries include HaGe (one of Germany’s largest agricultural suppliers), Svenska Foder (a Swedish subsidiary) and Scandinavian Farmers (covering the Baltic States). DLG Group is among Europe’s top exporters of feed and milling grain, malting barley, oilseed rape and seed, and its associated companies process these crops.

At the end of 2015, DLG Group and its partner, Puai, opened a new feed mill in Hunan province, China. With a capacity of 180,000 metric tons, its target customer base includes pig producers in Hunan and Hubei.

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