Co-op profits decline by 30%

PRE-TAX profits at Tipperary Co-op fell by nearly 30% in 2005.

This was due to a significant drop in product prices, reduction in EU supports and large increases in energy costs according to the 2005 accounts. Overall profits stood at €756,000.

Financial Controller, Michael Dunlea said turnover was up 5% on last year at €116 million.

Cash flow in Tipperary Co-op was at €2.67m generated by business, a strong balance sheet, absence of bank borrowings and the continued growth in shareholder’s funds, according to Mr Dunlea. Shareholders funds weighed in at €23.4m.

Chairman of the company, Matt Quinlan regretted the 4c/gallon drop in milk prices last year as a result of market price reduction. However he remained upbeat about the overall performance of the company.

“This year’s performance was excellent, given the lower market return especially for butter, general price downturn as a result of EU policies and large energy cost increases,” Mr Quinlan said.

Referring to pending milk quota changes, he urged the Government to retain ring-fencing to co-op areas in any new proposal.

He further urged for due consideration to be given to equity between those leaving the industry and those opting to expand.

Tipperary Co-op’s General Manager, Tim Dullea explained that dairy business was not profitable on its own but had been supported by other business entities.

He advised milk suppliers to consider the present market change as transition rather than crisis.

The core business activity in 2005 included processing 36,000 gallons of whole milk and producing over 7,000 tonnes of butter, 14,000 tonnes of milk powder and 5,000 tonnes of cheese. The cheese accounted for 53% of whole milk utilisation.