Donegal Creameries report profit rise

DONEGAL Creameries yesterday reported a 16.6% rise in pre-tax profits on the back of higher dairy prices.

The company said turnover for the six months to end June was up just 1.8% from €67.6 million to €68.7m, but pre-tax profits were ahead at €4.05 million with higher dairy commodity price and gains on the sale of property boosting profitability.

The company said the turnover figure was up primarily due to increased prices from sale of manufacturing milk reflecting higher commodity dairy prices during the period.

Earnings per share increased by 17.4% from 28.2 cents, while the interim dividend will be raised by 5% to 5.25 cents.

Turnover from the group’s agricultural unit, the largest division was down 1.3% at 44.9m, mainly from lower sales at its mushroom trading arm Carbury Mushrooms.

In the dairy division, turnover increased by €1.75m to €23.8 million, while its contribution to group profits was higher because of the improved pricing.

Turnover at the group’s agricultural trading stores was up on last year, however, the contribution to profitability was down due to more competitive market conditions for agri-inputs, while profitability at the group’s Irish Potato Marketing and Donegal Potatoes were down on last year due to seasonal factors.

At the sweet business, Oatfield’s, turnover was in line with last year.

“However, profitability continues to be affected by competitive pressures in export markets exacerbated by the strengthening of the euro,” the company said in a statement.

The company said it will be looking for alternative uses of its landbank and added that it has commenced construction on its Section 50 student accommodation project and has submitted a planning application for a retail and office development on another part of its Letterkenny landbank.

“The group is confident of a positive out turn for the second half of the year. The group continues to seek development opportunities, both in its existing businesses and through acquisition and sector consolidation, and to keep a tight control on all costs,” the company added.

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