FDBusiness.com

Ornua (formerly the Irish Dairy Board), Ireland’s largest exporter of Irish dairy products, has delivered a strong operational and financial performance for 2015 in terms of revenue generation, profit and new business development. Group turnover increased by 9% to €2.5 billion and EBITDA by 18% to €58.8 million.

By building routes to market for Irish dairy products, Ornua works to increase the value of Irish milk, and in doing so, delivers strong returns to the 14,000 farmers it represents.

The 2015 result includes a €9 million increase in brand and market development investment which now totals €45 million, and significant product price support to its members. Ornua closed the year with net debt of €17 million and a very strong balance sheet with net assets of €526 million, up 21% on prior year.

Product purchases from members rose by 16% in 2015, to a record 286,000mt.  This reflects the impact of Ornua’s work in opening new routes to market for Irish dairy products and the delivery of strong product price returns.

Reflecting this strong performance, a €14 million annual bonus, up 17% on 2014, was declared to Ornua’s members, including a cash element of €10 million. An additional special cash bonus of €15 million was declared from the gain on the disposal of a majority stake in Ornua’s US distribution business, DPI Specialty Foods, in late 2015. This brings the total bonus for the period to €29 million.

2015 was a challenging year across the world’s major dairy-producing regions as a combination of strong supply and demand weakness led to a fall in global prices. Globally, milk supply grew by over 5% over the January 2014 to December 2015 period while demand only grew by 3%. Consequently stocks have built and prices have weakened.According to Ornua, there is an urgent need for global supply constraint and any recovery of demand will be dependent on the Chinese economy, improved oil prices and the lifting of the Russian ban.

Kevin Lane (pictured centre), chief executive of Ornua, comments: “We are very pleased to report a solid 2015 performance across our Foods and Ingredients businesses.  In the first year following the removal of EU milk quotas and the first year of the Ornua identity, we have delivered growth in existing and new markets. We are confident that, whilst recognising the challenging market conditions that exist, our business will continue to deliver strong returns and growth thereby enhancing value for the farmers we represent.”