UK pork processor Tulip lost 210m Danish krone (£24m) in its final year under the ownership of Danish Crown, with 575m DKK (£65.7m) of goodwill written down ahead of its sale to US meat giant Pilgrim’s Pride.
Speaking ahead of the publication of Danish Crown’s full-year results on 21 November, the pork giant said Tulip’s losses after tax had narrowed from 370m DKK (£42.3m) during the 2017/18 financial year.
However, sales continued falling amid turbulent trading conditions, with Tulip’s revenues dropping from 7.3bn DKK (£834.5m) during 2017/18 to 7bn DKK (£800.3m) in 2018/19.
Danish Crown said its write-down figure was “slightly higher” than it expected in August, when it announced the sale of the Tulip business to Moy Park owner Pilgrim’s Pride in a £290m deal.
However, the Danish farming co-op said it had decided to increase the amount it wrote off as “a way of protecting the company against any negative surprises in the new financial year”, said group CFO Preben Sunke.
Danish Crown also revealed Tulip carried 1.9bn DKK worth of debt (£217.2m) at the time of its sale, as it stressed the divestment meant its balance sheet was “being strengthened”.
The sale of the business followed a series of warnings by Danish Crown over the long-term performance of Tulip during the past 12 months.
The financial difficulties facing the business were laid bare in January when CEO Jais Valeur said the group did not “have the competitiveness that we’re striving to achieve” as he initiated a second round of job cuts in three months.
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