Glanbia sees operating profit grow 18% as revenue reaches €2.7bn

Food group Glanbia has reported an 18% growth in operating profit to €161m and revenue is up 23% to €2.7bn for 2011.

The group’s Global Nutritionals division enjoyed sales growth in the US, as did newly acquired health and nutrition company BSN, which has been integrated into fellow US-based group member Performance Nutrition.

Dairy Ireland revenue rose almost 19% to €1.35bn, with profits up 23% to €53.6m. Volumes and prices in the ingredients business rose, but margins declined in the consumer products business, despite an increase in revenue.

Revenue from joint ventures, on a constant currency basis, rose by almost 30% to €541m, while profits grew by 20% to €26m.

The group anticipates that earnings per share will grow by up to 7% this year. Nonetheless, it has issued a cautious outlook for the year ahead in Irish dairy sales, due to the continuing general slump across the retail market.

Glanbia group managing director John Moloney said he expects the operating environment in 2012 to be more challenging than in recent years. He said the group’s guidance for 2012 is for 5-7% growth in adjusted earnings per share, on a constant currency basis.

Meanwhile, Mr Moloney also addressed speculation that Glanbia might partner with other dairy processors to develop new milk plants (or a “super co-op”) upon the end of the EU’s milk quota restrictions in 2015. The most frequently cited potential partner is Dairygold. Saying that the post-2015 expansion represented a “first class problem and an unique opportunity”, he said that Glanbia was maintaining an open mind, that it might either develop its own facilities, or it might consider a joint venture with another party.

He added that much of the speculation has probably come from Glanbia’s successful track record in managing joint ventures in the US, Nigeria and Britain. He dismissed talk of a possible demerger between the group’s plc and co-op.