HOCHDORF Holding Ltd

2018 half-year results - Seite 2

New production line Sulgen
After some initial delays we were able to move the new production and packaging line in Sulgen to commercial production from the middle of August. The ultra-modern and technically complex plant is running in line with our expectations. We are particularly pleased with the powder structure we have achieved.

Dairy Ingredients
The Dairy Ingredients business area achieved net sales revenue of CHF 188.2 million (previous year CHF 216.6 million; -13.1%). The lower sales can be explained by the continued price distortions between the milk fat and milk protein evaluation in the international milk market. The amount of milk, cream, whey and permeate (liquid volume) processed in the first half of the year showed a total reduction of a little more than three percent to 365.3 million kg.

The Dairy Ingredients division within HOCHDORF Swiss Nutrition Ltd introduced seasonal price reductions in the milk high season from March to May for the first time this year. There was a corresponding fall of 5% in the amount of milk processed in the Swiss plants. The overall liquid volume processed rose however to 229.7 million kg (previous year 225.6 million kg; +1.8%). The project to improve profitability by adjusting our portfolio and developing new speciality milk powders has been continued. With regard to agricultural policy, discussions were held between industry players, customers and suppliers on how best to implement the follow-up solution to the "Schoggi Law". Implementation will involve a certain degree of change in pricing for both customers and suppliers.

Uckermärker Milch GmbH continued to be affected by the market's low valuation for milk protein. The thriving butter business was not enough to fully cover the very weak milk powder prices. The curd business that was resumed in the middle of February and the butter milk business are running at the expected level. Production and sales of higher margin special milk powders maintained their successful trajectory.

Baby Care
The Baby Care division showed sales growth of 4.1% in the first half of the year and achieved net sales revenue of CHF 77.1 million (previous year CHF 74.1 million). As positive development, we were still able to achieve an increase in sales, despite delays with brand registration in China. The main reason for this was sales growth with existing customers in the Middle East and in Central and South America. However, customers in Asian countries also showed pleasing growth. It remains a key objective to register our brands in China as soon as possible.