Co-op ‘firmly on course’ after 33% rise in operating profits to €27.3m

Dairygold has reported a record operating profit of €27.3m for 2013, up 33%, with revenues up 16% to €847m, and a record milk intake up 4% to 959m litres.

The co-op paid its suppliers and trading customers a €7.5m bonus for the year ending March 31. On top of this 0.5c per litre bonus, it also paid its milk suppliers a market leading 38.1cpl monthly average.

The co-op’s five-year view showed profits near trebling from €11.8m, cumulative investment rising from €23.6m to €113.1m, and net asset value climbing from €221m to €274m.

The only downward figure is net debt, which has gone from €80m to €60m over the same five years. Dairygold has access to €100m in banking facilities for its post-quota expansion plans, but this will only be drawn down as the co-op progresses to each phase in its plan.

Phase one began in January 2013 with a €33m investment in the facility at Castlefarm, Mitchelstown, Co Cork. Phase two is also underway, developing drying facilities at the existing site in Mallow.

“It has been a good year, driven by great buoyancy in dairy markets, with the price stimulated by the impact of global supplies being reduced by weather impacts in the US and New Zealand, and the late spring in Europe,” said Dairygold chief executive Jim Woulfe.

“Our product mix of cheese, butter and whole milk powder fared well; 71% of that mix generated valuable whey, which is now an important part of our portfolio.

“We shared this success with our members. We also made shrewd capital investments and achieved plant efficiencies which will add to our figures in future years.

“Ideally, we’d like to replicate that performance over the next 12 months as we prepare for quotas ending next year.”

Turnover at Dairygold Food Ingredients Ireland was up 25% to €455m; turnover at its overseas ingredients wing was up 2% to €138m; with Dairygold Agri Business up 11% to €250m turnover.

Ruminant feed sales were up 12% and fertiliser sales were up 22%. The Lombardstown mill produced a record 8,800 tonnes in March and April. Dairygold gave a €7 per tonne rebate to members on feeds, and €5 per tonne on fertiliser bought in 2013.

“Dairygold’s post-quota strategy was overwhelmingly endorsed by its members, it took the lead role in responding to the fodder crisis, and its members produced a record volume of milk and delivered an excellent grain tonnage,” said Dairygold chairman, Bertie O’Leary, whose 10-year tenure is due to end soon.

“This financial performance ensures Dairygold and its members remain firmly on course with their plans for sustainable profitable expansion.”