International dairy conditions impact negatively on co-op’s operating profit

NEWMARKET Co-op has reported a sharp fall in operating profits in 2008 reflecting the tough international dairy conditions.

Profits before exceptional items fell from €1.448 million to €268,000 as the bottom fell out of the global dairy market.

The group said retained profits for the year amounted to €3.15m

The North Cork co-op said a significant proportion of the retained profit was accounted for by the sale of Newmarket Windfarms.

That yielded a profit of €2.3m net of investment. The group also achieved an exceptional income of €705,000 following the successful conclusion of a legal case.

Sales in 2008 were up by over 30% year-on-year, from €65.9m in 2007 to €87.5m. That boost in turnover was due to extra milk being processed during the year.

In all 43m gallons of milk were handled by the group of which 35m gallons were sourced from outside suppliers.

During the year shareholders’ funds increased by €2.5m to over €20m while the co-op invested over €16m in a critical upgrading at its cheese manufacturing plant in Newmarket.

That work was completed in the early part of 2008 with the investment part-funded under the Dairy Investment Programme.

Processing capacity at the plant was doubled as a result while greater efficiencies also resulted from the project, the statement said.

“In light of the fall in dairy market returns, the strong milk price paid by Newmarket and the challenges experienced by all processors during 2008, the business performed very well over the year”, chief executive Michael Cronin said. “We continued to support out members by paying a strong milk price. . . and increased our shareholders’ funds ensuring we go into 2009 with a healthy balance sheet.”

Newmarket manufactures cheddar and farmhouse cheeses, including Red Leicester and Blarney brands, for the Irish and British markets.