Dairygold, Ireland’s largest farmer owned dairy cooperative, has reported another solid financial performance for 2016, against a backdrop of very weak returns from international dairy markets, especially in the first half of the year.
Dairygold recorded a turnover of €756.1m (2015: €784.9m), delivering an EBITDA of €39.0m (2015: €41.2m). The farmer-owned cooperative achieved an operating profit of €17.5m, (2015: €19.2m), while increasing milk price support to its members to circa €25m, up from €20m in 2015. At year end the net asset value of the business was €307.6m (2015: €315.5m), while bank debt was reduced by €7.5m to a prudent €88.7m.
Dairygold continued its ambitious capital pro-gramme during the year, investing a further €15 million in the business, bringing the total invest-ment over the past six years to €200 million. This investment established a state of the art sustainable milk processing platform, across dairy sites at Mallow and Mitchelstown. The investment has increased processing capacity by 55%, enabling farmer members to fulfil their on-farm growth ambitions, but, more importantly, the business can now leverage its investments in infra-structure to avail of value added commercial opportunities.
Dairygold also streng-thened its track record in building strong commercial partnerships with global food companies with the announcement of the planned development of the new Jarlsberg® Cheese production facility in partnership with Norway’s largest dairy processor Tine SA. This will quadruple the current Jarlsberg® Cheese production in Mogeely.
Speaking about the Mogeely investment, Dairygold Chief Executive Jim Woulfe said: “Our commercial partnerships with global food companies have been an avenue to significant [extra] value for the business. We will continue to seek out strategic partnerships with leading global organis-ations that can leverage our best in class processing facilities to deliver more value added production for the business.”
He added: “Dairygold has successfully transitioned from the quota controlled production era to the more volatile, expansionary environment. We are now following a very clear strategic path. We have built a first class processing platform and realigned our organisational structure. We have invested in the people and capability and put the appropriate finan-cing in place, to deliver on our value added commer-cial objectives. We are now on the cusp of levera-ging these investments to deliver on our future strategy. Dairygold’s strategic growth ambitions are now specifically focused on developing value added nutritional opportunities, both through commercial partnerships and through acquisition.”