Valio Performance in 2010
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Valio milk profit increased and the price paid for raw milk rose in 2010
Valio Group milk profit* for 2010 increased to 41.1 euro cents per litre (2009: 39 c/l). The price paid to producers for raw milk was raised by 2 cents as of the beginning of August 2010, and over the whole year was paid at 40.9 cents per litre, up 0.5 cents on the previous year, and the second best in Valio’s history.
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The increase in the price paid to milk producers was enabled by the positive development of consumer products in Valio’s nearby markets, especially Russia and Sweden, the favourable development of the euro exchange rate against the Russian rouble, Swedish krona and US dollar, and the rise in the global market prices of ingredients.
Valio Group net sales for 2010 increased by 2 per cent on the previous year to MEUR 1,822. Net sales from international operations grew by 18%, while domestic net sales decreased by around 5%. Loans from financial institutions at the end of 2010 totalled MEUR 114 (2009: MEUR 209). The Valio Group milk margin** stood at MEUR 901 (2009: MEUR 863). Valio Group’s book profit for 2010 after taxes rose to around MEUR 39 (2009: MEUR 17).
Valio Group’s equity/assets ratio rose to 45% (2009: 43%). Investments totalled MEUR 68 (2009: MEUR 79).
The milk volume taken in by Valio from its owners totalled 1,899 million litres, the same as that of the previous year.
The biggest risk challenging the development of the milk profit is related to the instability of the global economy and the rapid changes in exchange rates potentially resulting from that instability.
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| A good year for the Valio Pension Fund |
The performance of the Valio Pension Fund in its 90th year was strong. The TyEL employers’ contribution percentage at 16.2% (2009: 14.2%) was almost one percentage point lower compared with Finnish employment pension companies. The net return on investment stood at 13.9% (10.4% for Finnish pension companies on average), and the solvency ratio excluding reliefs at 57.8% (2009: 45.3%). The corresponding figure for Finnish pension companies on average was 22.7% (2009: 18.8%).
*Milk profit = (Milk margin less the requirement for depreciation of fixed assets i.e. financing requirement for investments) / milk volume supplied by the owners.
**Milk margin = Net sales less other costs excluding depreciation and the price paid for raw milk and interest on shareholder loan paid to owners.
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