Dairygold Achieves Record Profits
Irish dairy co-operative Dairygold has increased operating profit by 33% to€27.3 million in 2013 on turnover up 15,9% to €847 million. The record operating profit was generated after paying a leading milk price and paying €7.5 million in year-end bonuses to milk suppliers and trading customers. The overall operating profit including share trading was €27.9 million, an increase of €7.0 million on 2012.
Dairygold’s earnings before interest, taxation, depreciation and amortisation (EBITDA) of €45.4million on core activities were up 19% on 2012. These strong financial results in 2013 increased the Net Asset Value of the business by €23 million to €274 million.
The strong financial performance was delivered by optimizing the product and customer mix and by the processing and operating efficiencies achieved following the investment in the business and continuous improvement over the last number of years. Dairygold’s individual businesses all contributed to the improved financial performance. In addition, strong returns from international dairy markets helped Dairygold deliver a leading milk price to milk suppliers.
The 2013 performance continues the strong recent trend which has seen the operating profit on core activities grow by 131% from €11.8 million in 2009 to €27.3 million in 2013. Dairygold has during this period, invested €113 million in the business, while reducing its net debt from €77.9 million to €60.9 million.
Jim Woulfe, chief executive of Dairygold.
In 2013, Dairygold recorded its highest ever annual milk intake from its milk suppliers of 959 million litres. This increased volume is seen as a good indicator of Dairygold milk suppliers’ desire for expansion, which is projected to increase by approximately 55% to 60%, based on milk suppliers’ individual forecasts.
2013 represented a key milestone for Dairygold’s Post Quota Strategy. The Strategy sees Dairygold building its business on a core cheese and IMF ingredients product portfolio, growing incrementally through an appropriately financed modular investment plan which will support both volume and margin growth.
A key focus of the plan is the continued development of the enhanced routes to market, including building strategic customer relationships, both independently and in conjunction with the Irish Dairy Board, for the additional dairy products that the incremental milk volumes will produce.
January 2013 saw work begin on Phase I of Dairygold’s expansion programme with a €33 million investment to develop and expand the co-operative’s Castlefarm facilities. Phase II involving the development of the existing site in Mallow is also underway. This will see the development of new state-of-the-art milk drying facilities capable of producing the full range of milk powders, up to and including, infant milk formula. The Mallow development continues Dairygold’s modular approach which aligns expansion with forecasted milk volume growth and separates the proposed investment into a number of phases.
Jim Woulfe, chief executive of Dairygold, comments: “The excellent financial results achieved in 2013 represent the continuation of the positive trend of the past number of years. Our strong financial position, combined with a thought out expansion strategy ensures that the Dairygold business is ready for growth. This will be achieved, both organically in a post quota environment and with strategic acquisitions as appropriate. This will be delivered to facilitate our members’ ambitions for expansion, maximise their income, whilst growing the value of the business.”
