Dairygold breaks €1 billion revenue ceiling for first time
HOWEVER, SOCIETY WARNS COVID-19 PANDEMIC HAS POTENTIAL TO HAVE A ‘SIGNIFICANT NEGATIVE IMPACT ON BUSINESS’
DAIRYGOLD has delivered a record-breaking annual turnover of more than €1billion for 2019, but warned that the COVID-19 pandemic has the potential to have a “significant negative impact” on the business.
Ireland’s largest farmer-owned co-operative this week announced its financial results for last year, revealing that it broke the landmark €1 billion revenue ceiling for the first time in its history.
It delivered an annual turnover of €1.02 billion, representing an increase of €27.5 million on the 2018 figure; and earnings before interest, tax and amortisation (EBITA) of €56.6 million, up by €8million (16 per cent) on the previous year.
At year end, the net asset value of the business was €373 million, an increase of €35 million (10 per cent) on the prior year.
The co-operative’s 2,750 milk suppliers expanded milk production by a staggering 50million litres during 2019, delivering a record 1.39billion litres of milk to the society over the year. The total represents a 65-per-cent increase since the abolition of dairy quotas in 2014.
Commenting on the results, Dairygold CEO Jim Woulfe said the company has delivered “a strong financial result in 2019” supported by robust performances across its dairy and agri business and favourable property transactions.
“A decade of capital investment has now delivered significantly increased processing capacity and a more efficient dairy processing capability,” said Mr Woulfe.
“We can develop our strategic planning to 2025 and beyond, confident in the knowledge that we are building on a very solid business platform, with the assets and capability in place to take full advantage of the growth opportunities that the dairy and agri sector will offer going forward,” he added.
The results showed that Dairygold’s €85million of cash in capital projects during the year, primarily as part of its €130 million phase two Post Quota Primary Processing Investment Programme. This brings to €225 million the amount the company has invested in capital projects over the past five 5 Year Capital Cash investment:
Net Asset Value:
€225.0 million
€373.0 million
years.
Dairygold said the year-end net bank debt of €157million remains at a “manageable level given the scale of the organisation and the levels of profitability being generated”.
Chairman John O’Gorman said the business was financially strong, well invested and “ready for the next phase of growth and development.”
“Over the last ten years Dairygold has supported its milk suppliers to critical that the future trade agreement is as close to the existing trading arrangements as possible,” said the company.
Addressing the rapidly evolving COVID-19 pandemic, the company said it had the potential to have a significant negative impact on the business, operationally, commercially and financially, “with significant challenges experienced from farm to market”.
“Continuity of food production is essential and it is clear that EU support measures for the Irish dairy industry are needed,” it said.
As part of their business continuity planning, Dairygold has established an in-house Pandemic Response Steering Group.
“This Group is constantly monitoring the situation to ensure that all necessary actions and appropriate measures are being taken in the interest of securing the safety, health and well-being of our employees, suppliers, customers, contractors, visitors and other key stakeholders while maintaining business continuity,” said the company.
“With peak COVID-19 impact likely to coincide with peak milk processing in an industry that utilises a perishable raw material like milk, it is essential to explore all contingency measures. As a company and an industry we are putting significant effort into doing that. Dairygold is working with the other dairy processors, through Dairy Industry Ireland (DII), to identify all options for co-operation and pooling of resources.”