Dairygold Breaks €1 Billion Revenue Ceiling For the First Time
Dairygold, the Irish dairy and agri business co-operative, increased annual turnover by 2.7% to €1.02 billion in 2019, to break through the €1 billion revenue barrier for the first time. EBITDA rose by 16% on the prior year to €56.6 million. Operating profit for 2019 grew by 24% to €35.8 million.
Dairygold’s 2,750 milk suppliers expanded milk production by 50 million litres during 2019 to deliver a record 1.39 billion litres of milk to the Society over the year. This represents a 65% increase since the abolition of dairy quotas in 2014.
Dairygold invested €85 million of cash in capital projects during the year, primarily as part of its €130 million Phase II Post Quota Primary Processing Investment Programme. The Society has now invested €225 million in capital projects over the past five years. The year-end net bank debt of €157 million remains at a manageable level given the scale of the organisation and the levels of profitability being generated. At year end, the net asset value of the business was €373 million, an increase of €35 million (10%) on the prior year.
Jim Woulfe, chief executive of Dairygold, comments: “Dairygold delivered a strong financial result in 2019, supported by robust performances across our Dairy and Agri businesses and favourable property transactions. A decade of capital investment has now delivered significantly increased processing capacity and a more efficient dairy processing capability.”
John O’Gorman, chairman of Dairygold, says: “Over the last ten years Dairygold has supported its Milk Suppliers to increase overall milk production by 65% and in the process completely transformed its business into a world class provider of dairy ingredients for the international marketplace. The business is financially strong and well invested, ready for Dairygold’s next phase of growth and development.”
Dairy Markets
Moderate growth in global milk production combined with modest demand provided a reasonably balanced global market for dairy produce throughout 2019, although the year was not without its own peak and troughs. Looking ahead, the biggest threat to global dairy markets is the impact of the Coronavirus (COVID-19) on supply chains and demand. Meanwhile, the ongoing US/EU trade dispute continues to add a 25% tariff to Irish cheese and butter imports into the US.
Dairy Business
Dairygold is currently concluding a €130 million capital investment programme required to deliver the increased processing capacity, product mix flexibility and commercial opportunity required to manage milk growth forecasts to 2023.
This investment is across three projects: to provide the appropriate infrastructure for the new Jarlsberg Cheese Manufacturing facility in partnership with Norwegian dairy processor, TINE SA in Mogeely (Cork); the redevelopment of Demineralised Whey production at Castlefarm Dairy Processing Complex in Mitchelstown (Cork), which will significantly increase capacity; and a new Milk Evaporator and Drier at Dairygold’s Nutritionals Campus in Mallow(Cork).
Jim Woulfe says: “Over the ten years since 2009, €425 million has been invested by Dairygold and its Partners across our four processing sites. This has delivered three new Milk Powder Factories, a new Cheese Factory in Mogeely and an enhanced Cheddar Factory in Mitchelstown, along with a complete regeneration of Whey Processing. In addition to the increased processing capability, these investments have also delivered advanced technology and efficiency.”
