Arla Pays Additional €124M to Company's Farmers

EU - Arla’s Board of Representatives has decided to distribute a total of €124 million to the farmer-owners as the annual supplementary payment, also known as the 13th payment. On average, that amounts to one eurocent per kilo of milk supplied by each farmer.
calendar icon 3 March 2017
clock icon 2 minute read

At the meeting in Halmstad, Sweden, the Board of Representatives today debated and decided how much of Arla’s annual profit for the 2016 financial year should be paid out as supplementary payment and how much should be consolidated into the Arla Group for further investments in new strategic growth opportunities for the company.

Total net profit of the Arla Group in 2016 grew 20.7 per cent to €356 million, of which the profit share of Arla Foods amba is €347 million, corresponding to 3.6 per cent of Group revenue.

Excluding the profit from divestments, which remains in the company for re-investment, the available annual result for allocation for 2016 was €227 million. Of this, the Board of Directors had proposed that €124 million would be paid out directly to Arla’s farmer-owners, with €103 million being retained in the company (partly as individual retainment that each farmer-owner can take with him/her when their membership ends, partly as common retainment that remains in the company as equity and for strategic re-investing).

After a thorough debate, the Board of Representatives voted in favour of the proposal from the Board of Directors with 181 votes for and 2 against.

This means that Arla’s annual result for distribution to owners is allocated as follows:

  • €124 million for supplementary payment (averaging 1.00** eurocent per kilo milk plus interests)
  • €30 million for individual retainment (averaging 0.28* eurocent per kilo milk)
  • €73 million for common retainment (averaging 0.54 eurocent per kilo milk)
  • €120 million from the divestment of Rynkeby retained for strategic re-investing

* EAGM Walhorn merger agreement: EAGM members will receive individual retainment from fiscal year 2017. Until then this amount is distributed to common retainment in Arla. AMCo individual retainment partly transferred to common capital. AMCo merger agreement: Individual retainment partly transferred to common retainment.
**AMCo merger agreement: 13th payment partly transferred to common retainment and partly used to pay off the loan.

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