Dairy Board’s profits rise by 29%

Innovative products and an equally unique €350m loan facility have set the Irish Dairy Board on a solid footing for anticipated post-milk quota growth.

The IDB yesterday unveiled a 29.1% rise in pre-tax profits to €20.9m for 2011, built on €2bn in revenues, up 5.2%.

The group’s net Capex and acquisitions investment is up 79% to €29.5m, a sign of its expansion plans. The IDB’s members will also be happy, having received €12.9m in payouts, a 9.3% rise.

The main marketing body for the Irish dairy industry, the IDB is investing heavily in North Africa, China. and the Middle East.

Backed by Rabobank, AIB, Bank of America Merrill Lynch, Barclays, HSBC, and Ulster Bank, the IDB has a unique, two-part €350m loan facility to drive Irish dairy exports — a €160m syndicated loan for the IDB’s existing needs and growth plans; and a €190m committed syndicated ‘reverse invoice discounting’ facility to fund the working capital needs of members.

Finance director Cathal Fitzgerald said: “Normally, loans are linked to cashflow and leverage, which can be limiting. We have arranged a supplier financing facility, and a syndicated loan which is linked to our balance sheet and a covenant.

“The banks have done the due diligence on us. They’ve recognised the value of our export-oriented industry and business. They can see the significant international opportunities for our products. It is now down to us to put the right people in place in these markets.”

One example of this target-specific strategy is the Kerrygold-branded UHT milk product developed to suit Chinese tastes. German consumers have also taken to the new Kerrygold Extra spreadable butter.

German sales of Kerrygold rose by 19.7% in 2011, out-performing the overall German market’s 14.9% growth in value.

The new look premium range of Irish dairy products debuted in Belgium and have since been launched in over 50 markets. Total branded sales rose by 17% in value and 3% in volume due to like for like sales growth and the opening of new and strategically chosen markets.

The IDB’s consumer foods business reported sales of €771.8m, up 9.7% on the previous year.

Dairy trading and ingredients exported sales of €566.5m, up 21%.