Farm Ireland

Monday 21 May 2018

Dairygold's profits drop slightly to €27.2m

Dairygold CEO Jim Woulfe
Dairygold CEO Jim Woulfe
Darragh McCullough

Darragh McCullough

Ireland's largest farmer-owned dairy processor, Dairygold, posted profits of €27.2m for 2014 yesterday.

Despite milk throughput rising 5pc to just short of 1bn litres, profits at the Mitchelstown-headquartered business were slightly lower than 2013, on the back of a 50pc fall in prices on international dairy markets from February through to December last year.

The co-op also spent close to €7m by subsidising the milk price it paid it's suppliers by 0.6-0.7c per litre.

In addition, the society has opted to allow farmers to buy feed and fertiliser at 0pc credit during 2015, in order to help them cope with lower prices and a superlevy bill that is expected to be close to €15m for the co-op.

A statement from the company said that the results were in line with the previous year's record financial performance and continued a trend of achieving strong operating profits, while paying a leading milk price.

Dairygold's earnings before interest, taxation, depreciation and amortisation (EBITDA) on core activities rose by €1.8m to €47.2m.

It invested €50.1m in new processing facilities 2014 at its Mitchelstown and Mallow sites in Co Cork to cope with part of the 50pc increase in production that the end of the milk quota regime is expected to yield in the Munster region.

Despite this latest tranche of investment representing almost one third of the total investment made by the co-op since 2009, its net indebtedness only rose by €10.7m to €71.6m.

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Dairygold processes almost 20pc of the Irish milk pool, purchasing milk from 3,000 suppliers.

Much of the investment has been targeted are creating "pharma-grade" processing facilities capable of producing key ingredients for high value products such as infant milk formula.

More than 95pc of the firm's 600m litre whey pool is converted into demineralised protein powders that makes up to one third of the contents of infant milk formula products.

Half of this is exported, while the rest is sold to companies such as Danone that have significant infant milk formula manufacturing facilities in Ireland.

"We estimate that the economic benefit of our growth by 2020 will be €226m annually and create 1,200 full time jobs.

"The significant boost that this will give to rural Ireland will be hugely beneficial over the next five years," said Dairygold's CEO Jim Woulfe.

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