Dairygold reports profits of €13m

DAIRYGOLD’S results for 2009 show the group encountered another tough year as dairy markets remained weak internationally.

However, earnings improved significantly year-on-year with the operating profits of €13.4m achieved against a much lower €3.1m for 2008.

The north Cork group saw turnover fall by €133 million to €555m, down from €668m in 2008, which represented a 13% decline over the 12 months.

Borrowings at the society, which has a minority stake in Reox Holdings, rose by almost €10m for the year, to just under €78m.

That increase reflected tougher times for dairy farmers, who found it difficult to pay their bills to the co-op following another bad year for milk prices.

Debt was incurred also through the purchase of Solailoire, a small industrial cheese business in France. And the buying back of seven 4HOMES stores from the run down Reox Holdings also contributed to higher borrowings within the group.

Society chief executive Jim Woulfe said all divisions of the business in Ireland and in Britain made a “positive contribution to the bottom line during 2009”.

Under the circumstances he was “pleased” with the outturn and with the fact that Dairygold managed to deliver a year when operating profits rose significantly, notwithstanding the difficult trading environment.

In his commentary with the results, Mr Woulfe said that at a very challenging time for Irish business where credit conditions are tight, the company emerged in a stronger position, having managed to improve its overall profitability during the year while still lifting milk prices in September.

Mr Woulfe said the society, which has gone through a traumatic period, “will not be doing any major strategic moves for the next two years”. The period ahead “will be a period of consolidation”, he said.

Group chairman Vincent Buckley said the ambition of the society in the short term is to “supply farm inputs at least possible cost, to process our members’ milk efficiently and to pay the best milk price possible consistent with dairy marketplace returns”.

When comes to the rationalisation of the sector Mr Buckley said the group “is always open” to developments that would enhance the cost efficiency of the Irish dairy industry.