Dairygold report strong 2011 performance

Dairygold Co-Operative Society Limited had another successful year, generating an operating profit on its core activities of €22.6 million, a 19.6% increase on the 2010 figure of €18.9 million.

2011 was characterised by strong returns from international dairy markets, increasing on farm milk production which created higher processing throughputs. Dairygold’s optimisation of its product and customer mix, together with improved operating efficiencies helped to increase profitability.

Turnover in 2011 was €757.8 million, an increase of 9.3% or €64.3million on the previous year. The increase was generated across the main business activities of dairy processing and agri trading.

Commenting on the performance Dairygold Chief Executive Jim Woulfe said, “In the dairy operations, improved markets and the higher throughput increased turnover and this along with continuous improvement in efficiencies helped to deliver improved results. The agri operations benefitted from increased on-farm activity which helped the performance of the fertiliser and feed businesses. The retail business, however, was impacted by weak consumer sentiment and while the farmer related spending across its extensive stores network was maintained. Intensive promotional activity, in an effort to maintain sales did impact margins.”

In 2011 Dairygold invested a total of €33.9 million in the business, €15.4 million in capital expenditure and €18.5 million in acquiring a portfolio of strategic property assets from Reox Holdings plc.

The Society’s net debt was reduced by €13.6 million before the investment of €18.5 million on the acquisition of a portfolio of assets from Reox Holdings plc, which increased the net debt by €4.9 million to €67.2m at the year end.

The business has fulfilled all its obligations including debt and cash flow management which is important as it faces the challenges of funding milk production expansion.

The Society Chairman, Mr Bertie O’Leary said, “2011 was another good year for Dairygold where the Society paid a leading milk and grain price, recorded a robust financial performance and strengthened its Balance Sheet. A succession of strong financial performances confirm Dairygold as a strong and stable business that is ready to take full advantage of the opportunities that post quota expansion offers.”