Donegal Creameries report sharp profit drop
PROFITS at Donegal Creameries fell sharply during the first half of the year, as the business struggled with low potato prices.
For the six months to June 30, the company, which has operations in Ireland, Britain, the Netherlands and Brazil, recorded a pre-tax profit of €150,000, down from €1.07m for the same period last year. Revenue jumped 12pc to €35.1m.
In a statement, the company said the fall in earnings was “mainly attributable to a difficult European and South American season for seed potatoes due to the temporary market oversupply as well as continued investment in our speciality value added dairy business, partly offset by an increase in profits in our agri-inputs division”.
The firm was traditionally a milk based business but has moved away from that to focus on produce such as potatoes and speciality dairy products.
Despite the difficult first half of the year, company chairman Geoffrey Vance forecast full year earnings to increase by 5pc overall. That is largely because of the seasonality of the firm’s produce division, which generates three quarters of its income in the last three months of the year.
Shares in the company climbed 6pc on very light volume, and by noon were up 6pc at €3.50.