Dutch cooperative Royal FloraHolland has released its annual report for 2023 showing that the group made a ‘truly disappointing’ €17 million loss in what it described as a ‘truly challenging operating environment.’
Among the factors which affected the profitability of the world’s largest flower and plant trading system were higher labour costs (up €16 million), higher energy costs (up €6 million) and the repurposing of a cold store in Naalwijk which cost €3 million. The company’s transport branch Floriway also underperformed.
Despite the problems, CEO Steven van Schilfgaard said the organisation had achieved many strategic milestones and continued to harmonise its logistics hubs. However, challenges remain in integrating the systems of Royal FloraHolland and Floriday, which merged in 2008. “The real milestone will be carrying out all clock auctions centrally, which we are going to achieve over the coming period,” he added.
CFO David van Mechelen added, “In 2023, like last year, we broke the 5 billion product sales mark. Still, this is disappointing because the loss is bigger than we expected namely 17 million after tax. It was a combination of factors that put pressure on our financial results.” As well as the factors outlined above, the group was impacted by rising interest rates, a difficult property market and the fact that some anticipated property sales failed to materialise.
He continued that Royal FloraHolland has a strong balance sheet, allowing it to ride out the bump. “Our main priority for 2024 is to return to profit,” he said. “We will do this with a tight budget, targeted cost measures and price increases over the course of the year.” He said that provided there were no “strong headwinds or unexpected setbacks” the company should at least break even this year.