Operating profit jumps at Arrabawn

ARRABAWN Co-op generated an operating profit of €4.1 million in 2007 against €836,000 in the previous year, the society’s annual general meeting was told in Nenagh, Co Tipperary, yesterday.

Chairman Patrick McLoughlin also reported that turnover for the year was €178 million, up from €132m. The retained profit for the year after exceptional items, interest, other income and tax, was €3.9m. This compares with €2.5m in 2006.

Dairy Division turnover was €121.3m, up by €35.4m, and Trading Division turnover was €56.8m, an increase of €10.3m on the previous year.

The society’s consolidated group balance sheet remains strong with total shareholders’ funds amounting to €30.5m, an increase of €4.1m on 2006.

Mr McLoughlin told shareholders that for the first time in years global demand for dairy products exceeded supply.

The shortage of stocks, which had already been depleted in the EU and the US, exacerbated the situation. All market support was removed during the year and EU and world market prices converged for all products except butter.

“This increased demand led to better product prices, and I am happy to say that Arrabawn was in a position to return these increases directly to suppliers in improved milk prices,” he said.

Mr McLoughlin said the market outlook for 2008 was not as strong as had been hoped for at this time.

Currently markets are weak, but there is some optimism for the latter half of the year. As supplies tighten then stronger markets are possible.

In the liquid milk division, he reported that volume sales increases were achieved in the marketplace, and that the retail price of milk also increased in line with the increased price of raw materials.

He said a major redevelopment programme for the society’s Newport store will serve as a template for the redevelopment of others stores in the group.

Mr McLoughlin said that the animal feed the market in 2007 was very difficult as native grain prices were very high at harvest due to bio fuel demands, and difficult crop conditions in different parts of the world which led to market scarcity.

“The high grain prices were welcome for some of our members but impacted severely on others who are buyers of feed,” he said.