Profits increase to €27m at dairy co-op Carbery
Carbery Group, the Cork-based international manufacturer of value-added ingredients, flavours and cheese, has reported an increase in annual earnings of 4.8pc to €37m for year ended 2016.
The group, which is owned by four Irish co-operatives, reported operating profit before interest, tax, amortisation and exceptional items of €27.1m, an increase of 6pc year-on-year.
However turnover for the year was down to €340m compared to €349.5m in the previous year.
Carbery's Irish-based dairy business had a good year with solid margins and new business from both its cheese and ingredients divisions.
Milk supply processed at Ballineen in 2016 was up 4.4pc to 470m litres.
Dan MacSweeney, CEO at Carbery Group, said that the results were achieved against a market backdrop of weak global dairy prices.
"During the year, we prioritised the need to support milk prices for our dairy farmers and, once again, Carbery paid industry-leading milk prices," Mr MacSweeney said.
"This was possible due to the underlying strong performances from our Ireland based dairy and nutrition divisions and our international division, Synergy, which continued to grow its customer base in overseas markets."
During the year the group invested a further €15.4m in its dairy and ingredients divisions in line with the group's growth strategy, bringing investment in the business over the past five years to €78.2m.
Synergy, the group's international flavour and natural extracts division, reported strong growth in its key customer markets of the US, South America, Europe and South East Asia.
The business operates three sites in North America, one in Brazil, one in the UK and a site in Thailand serving South East Asia. As well as driving organic growth, Synergy plans future growth through further acquisitions.
Commenting on the market environment during 2016, Mr MacSweeney said that while dairy markets were difficult in the early part of the year as milk flows in Northern Europe grew strongly, the reduced milk flows late in the year had a positive impact with prices increasing.
"This trend continued into 2017, however, market pricing for the second half of this year is still a challenge due to the current weakness in dairy markets in the last month or so," he said.
In the medium term, Brexit presents a significant challenge to many businesses in the food industry in Ireland, and Carbery is not immune to this.
"We are currently evaluating all potential scenarios with a view to limiting the impact of the Brexit process on our shareholders and milk suppliers," he said.
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