Arla Raises Revenue Outlook Amid Rising Dairy Prices Despite Initial Decline

Denmark’s dairy giant Arla has raised its full-year revenue forecast despite reporting a 6% drop in first-half revenue. The company attributes the positive outlook to rising dairy prices due to reduced global milk production. Arla expects consumer purchasing power to improve as inflation subsides and wages rise.

Denmark's Arla, one of the world's leading dairy producers known for Lurpak butter and Castello cheese, raised its full-year revenue forecast on Wednesday, despite a decline in first-half revenue. Arla anticipates rising prices due to a shift in supply and demand dynamics.

The first half of 2024 saw a global reduction in milk production, leading to increased dairy prices in commodities, retail, and foodservice sectors, noted Arla CEO Peder Tuborgh. He expects a positive trend in consumer purchasing power in Europe, as inflation decreases and wages rise.

Despite a 6% revenue drop to 6.6 billion euros in the January-June period, Arla now forecasts full-year revenue between 13.4 billion and 13.9 billion euros, citing higher prices and volume expectations.

(With inputs from agencies.)