Lakeland Dairies profits hold firm in spite of a 25pc drop in turnover
OPERATING profits at Lakeland Dairies held firm through 2009, despite a 25pc drop in turnover at the country's second largest milk processor. The company reported profits of €1.4m on a turnover of €325.7m for the year ended December 31.
This compared to profits of €1.37m on a turnover of €449.3m in 2008.
A serious fall-off in demand from global buyers resulted in a major fall in commodity prices and a marked reduction in demand for key products.
Lakeland Dairies chief executive Michael Hanley said that while the worst of the downturn could reasonably be expected to be over, market conditions would improve only gradually throughout 2010.
"There has been massive volatility in key dairy markets throughout the year, which did not favour Irish exporters," Mr Hanley said.
"Lakeland Dairies performed robustly in this climate and did well to declare a stable operating profit. This is satisfactory, bearing in mind our imperatives to support milk price, in line with market conditions, while reinvesting in the strategic long-term development of the business."
A €20m investment by Lakeland Dairies in new milk-powder-processing facilities at Bailieboro, Co Cavan has been completed on schedule.
The group exported dairy products to more than 70 countries. It closed the year with a strong balance sheet and shareholders' funds of €71m.
Meanwhile, it is understood that the Nenagh-based dairy Arrabawn Co-op has paid Kerry Group around €5m for the Dawn Dairies milk business in Galway.
The co-op confirmed that it had entered into a consultation process with employee representatives of Dawn Dairies. This process lasts for 30 days, during which Arrabawn will be discussing the transfer of the business with the Dawn representatives.
Arrabawn Co-op has a liquid milk plant at Kilconnell, near Ballinasloe, Co Galway, and it is expected that Dawn's processing and packaging operations will shift to this facility.
Arrabawn yesterday reported an operating profit before exceptional items of €1.26m for 2009, compared to a loss of €1.6m in 2008.
Turnover for the year was €125.8m, which was down from €165m in 2008. Net debt was reduced by €2.26m to €7.1m and shareholder funds increased by 5.6pc to €28.9m.