Carbery reports 94% rise in profits

CARBERY Group reported a 94% increase in pre-tax profits last year. This was due to improved dairy market returns and the incorporation of its Syngery division’s acquisition of Van Lab for the full year.

The group, based in west Cork, reported a very good trading year with strong performances across all its business units.

Pretax profits were €8.47 million (compared with €4.4m in 2006) while turnover rose 26% at €222m from €176m. EBITDA was at €12.2m, up from €6.8m in 2006.

Chief executive Dan MacSweeney noted that 2007 was a very volatile year for the dairy business as prices increased rapidly from the first quarter.

“This volatility increased as the year progressed and it was possible to increase milk prices by almost 50% over that period.”

Mr MacSweeney said dairy markets continue their volatile trends but in a downward direction.

“While markets are flat currently, one has to take comfort from the absence of stocks and the high feed price which will keep a floor under the cost of production in the many parts of the world where milk is not produced from grass. The relative advantage of producing milk from grass is now significant.”

He said the current weakness in the US dollar and sterling in relation to the euro has implications for 2008 returns.

The annual report notes that cheese, the predominant output of its dairy division, reacted slowly to increases in commodity markets and price rises did not materialise until the third and fourth quarters. Nevertheless, the division performed very well.

Carbery’s Ingredients Division, which includes Carbery Dairy Ingredients as well as Synergy, its sweet and savoury taste business, also reports a very satisfactory year.

Carbery Group is owned by the four West Cork Coops — Bandon, Barryroe, Drinagh and Lisavaird — which are consistently high performers on milk pricing.