IDB's 55pc profit hike beats slump
The Irish Dairy Board (IDB) overcame a major downturn in global markets in the first nine months of 2009 to record a 55pc growth in profit.
The operating surplus at the dairy marketing body rose by €13.4m to €37.7m, up from €24.3m in 2008.
The board's Kerrygold brand performed particularly well in 2009 and delivered record sales through its Irish operations and its wholly owned subsidiaries.
This helped push profits at the board back to 2007 levels, when demand for dairy produce drove prices to record levels and saw the IDB's operating surplus hit €34.8m.
A 12.8pc reduction in turnover at IDB reflected the difficult global trading environment for dairy produce. Turnover fell to €1.82bn, down from €2.09bn the previous year.
IDB finance direct Cathal Fitzgerald said the group's increased profitability was the result of improved performance by its commercial and food ingredients business.
He said the positive trading environment that prevailed during the second half of 2009 helping the consumer-foods division increase volumes and margins.
Mr Fitzgerald admitted that the slide in prices through 2009 had also enabled IDB to trap a greater margin from sales.
He said management at the board's US distribution business had moved swiftly to counter falling returns from that business.
The group's balance sheet improved significantly with net assets increasing by €25.6m to €384m during 2009, while the group's debt to equity ratio was 7pc. Bank borrowings, net of cash, fell from €207m in 2008 to €27m last year.
A three-year syndicated funding agreement for €250m was secured during the year with two Irish banks and four international lenders. Management said this as a "vote of confidence" in the business and said the availability of funds will provide a stable financial base for the group in what is likely to be a credit environment that continues to be difficult.