Limerick infant formula firm pays €957m dividend

The China market is increasingly important

WYETH Nutritional, the Limerick-based infant nutritional formula producer, last year paid out of a dividend of $1.1bn (€957m).

The company paid out the dividend after a number of years of strong performance boosted by the soaring demand for the company’s products in China.

The new accounts show that pre-tax profits at the Nestle-owned company totalled $12.43m, after plunging 96pc from the pre-tax profits of $336m recorded in 2016.

The company – based outside Askeaton village in west Limerick – recorded the sharp drop in pre-tax profits after cost of sales increased by 59pc, going from $397m to $631.5m, while the firm’s other operating income of $102m in 2016 was not repeated last year.

The $102m gain in 2016 arose from the sale of intellectual property to a connected firm.

The company recorded the drop in profits as revenues increased from $650.37m to $655.8m in the 12 months to the end of December last.

The directors state that they are satisfied with the firm’s performance indicators for the year. The dividend last year followed the company paying a dividend of $152m in 2016.

Numbers employed at the plant last year reduced from 652 to 628. The plant produces formula products from 50 million gallons of Irish cows’ milk each year.

The demand for the company’s products in China is substantial, and Ireland is one of the top suppliers to the premium high-value infant formula market in China.

Wyeth Nutritionals is one of the four main formula companies based here, with the others being Abbott, Danone and the Kerry Group.

The China market is increasingly important for the Irish players following the 2015 decision of the government there to abandon its controversial one-child policy.

Staff costs at the company last year increased, going from $83.36m to $89m. Directors’ remuneration last year increased from $465,000 to $760,000.

The dividend payout in 2017 resulted in the company’s net assets last year reducing from $1.367bn to $308.9m.

Shareholder funds include accumulated profits of $297.6m.

The profit last year takes account of non-cash depreciation costs of $27m and R&D costs of $13m.