Carbery profits at €2.7m in tough year

A PRE-TAX profit of €2.7 million on turnover, which fell by 10% to €183.8m, was recorded by the Carbery Group for last year.

The West Cork-based food group described 2009 as a challenging year, with results revealing that it had a mixed performance.

Significant price decreases in global dairy markets had a marked impact on its cheese division, according to its annual results, published yesterday.

But the group’s ingredients division, notably its taste business, Synergy, reported strong revenue and earnings growth in its principal markets in Europe, the United States and Asia.

Carbery said continuing volatility in global dairy markets, against a recessionary economic backdrop, generated operating losses in its dairy division.

Due mainly to continued weakness in consumer demand and an unfavourable sterling exchange rate, cheese prices continued to fall in the first half of 2009 but the decline moderated in the second half of the year.

The price decline had negative consequences for milk prices, which on average decreased by 30% from 2008 prices.

Carbery subsidised milk prices during the year. This helped the West Cork co-ops to pay a stronger milk price than markets generated and helped to support dairy farmers in times of extreme difficulty.

The group also commissioned its new state- of-the-art cheese manufacturing facility in March 2009, which it said incorporated the best available technology.

It enhances the efficient manufacture of the group’s range of cheeses, including its flagship Dubliner brand, its mature cheddars and its reduced fat cheeses.

Carbery Group chief executive Dan McSweeney said 2009 was another tough year in the dairy market with a continuation of the volatility that was seen in 2008.

“With the continued fall in product prices, there was considerable price pressure on our cheese division. This pressure was offset by the continued strength of our ingredients division,” he said.

Mr McSweeney said the Carbery Group is now a strong and diversified food business with a major international focus.

“Our strategy, pursued by the company over the last 10 years, has reduced our dependence on volatile dairy markets.

“The company has a clearly defined strategy which will generate further top-line and margin growth over the coming years,” he said.

Mr McSweeney said the group sees stability returning in 2010 to what have become very volatile dairy markets.

The relationship of the euro to both sterling and the US dollar will be critical to returning value on export markets.

“Moderation in global milk supply growth is also key,” he said, adding that Carbery will continue to add value to its cheese business and grow its value added ingredients business in 2010.

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