Profits were ahead even though turnover stayed flat at €110 million, largely thanks to better cost management and an improved product mix.
The society, which is based in Tipperary Town, generated cash inflows of €3 million during the year to December and splashed out almost €1.5 million on capital expenditure. It said “continued prudent management” of its finances meant the balance sheet remained strong, with no net borrowings at year end. Shareholders’ funds stood at €24 million, down slightly from €23 million the previous year.
Speaking at the society’s annual general meeting, chairman Sean Murray said the increased profits were delivered despite adverse changes in EU support structures.
Better control of costs and greater balance in the society’s portfolio of products and businesses, coupled with the ability to hold milk prices steady, were the key drivers that benefited the bottom line.
The co-op’s French subsidiary, the Dijon-based Tippagral, would continue to play a part in extending the co-op’s cheese business.
Mr Murray warned, however, that falling margins were inevitable in the milk business thanks to further cuts in EU supports. But he remained upbeat about the medium term prospects for milk, which he said had “very positive possibilities” despite being volatile in the short term.
General manager Tim Dullea said Brussels-inspired policies on milk management were causing unnecessary hardship among dairy farmers and hurting their incomes.
These policies could have long-term effects on the stability of markets for diversified dairy products.
Mr Murray is due to step down as chairman and retire from the co-op’s board shortly. He paid tribute to his predecessors and said he was honoured and proud to have served on the co-op’s board for nearly 30 years.
“I have encountered the true co-operative ethos and I have great confidence that it will fortify and endure the society in the challenges ahead,” he said.