Turnover up nearly 10% for Aurivo in ‘record’ year

Aurivo – which is headquartered in the north-west of Ireland – saw its turnover increase by almost 10% last year, according to financial results for the year ending December 31, 2017.

Published this morning (April 25), the results indicated a year of “strong business development and financial performance in a volatile year, marked by historic butter prices internationally”.

This occurred in a year when Aurivo processed 420 million litres of milk – a record year and an increase of 8% on 2016.

Marts also continued to make a “valuable contribution” to the business, with sales rising last year to €81.6m from €78.5m in 2016.

Financial performance

Aurivo has reported a group operating profit – before exceptional items – of €3.9 million, an increase of 10% on the out-turn for 2016 (2016: €3.57 million).

Meanwhile, turnover for the year was €426.4 million, an increase of 9% on the previous year.

The performance illustrates the strength of Aurivo’s underlying business and that of its operational and commercial platforms. Net debt in the period reduced significantly from €16.6 million in 2016 to €5.7 million in 2017.

“Aurivo continued its capital programme in 2017, investing a further €4 million in the business bringing total investment in the co-operative to €28.7 million over the past seven years,” the group’s financial statement added.

Performance overview

Aurivo’s Consumer Foods recorded a “very strong” year in 2017 – with sales across milk, butter and sports nutrition at €99.1 million, a rise of €10.7 million on the previous year.

The result was reportedly aided by rising prices and through product innovation and increased investment in its brands. During the year, Aurivo added new flavoured milks to its range and carried out a relaunch of its protein milk.

This occurred while investment in the Connacht Gold brand continued at pace, the statement said.

Meanwhile, the group’s Dairy Ingredients had a “tremendous year” with sales in the business growing by 41% to €143.5 million, it added.

“It was a strong year for manufacturing milk driven by ongoing global demand. Putting the business on a sustainable footing, our investment programme continued in the period.

“The extensive upgrade of our Dairy Ingredients facility in Ballaghaderreen commenced in 2017. The five-year upgrade investment plan, is focused on meeting anticipated global growth and demand.

“To that end, we continued to expand our export customer base in the Middle East and also entered new markets such as the Ivory Coast,” the statement said.

Agri Business and Marts

Thanks to product development as well as increased marketing investment and customer focus, Aurivo’s Agri Business returned to growth in 2017 – with an increase in sales of almost €5 million, bringing the total for the year to €102.1 million.

Aided by the launch of Nutrias Feed across Donegal and Northern Ireland, feed sales were up 18% year-on-year. Fertiliser sales also finished the year up 13% on 2016.

The group’s retail business, Homeland, recorded a strong year and a new store was opened in Belmullet, Co. Mayo.

In relation to several new initiatives at livestock marts run by Aurivo, specialised sales at Ballymote Mart (Co. Sligo) commenced in 2017 as well as calf collection centres being introduced – all of which performed strongly.

Aurivo also took the decision to introduce online banking last year, following requests from customers.

‘2017 was a year of achievement’

Commenting on the results, Aurivo’s chief executive – Aaron Forde – outlined that 2017 was a year of achievement. But he warned that challenges lie ahead.

While milk supply growth continues in 2018, the current year will be one with significant volatility. Brexit is an uncertainty for our business and the wider sector.

“We continually monitor the situation and continue to put in place plans through our Brexit team to ensure we are as ready as possible for the inevitable fallout from the UK’s exit of the EU.

“Ultimately, the sector needs the Government to get the best possible deal for Irish food and agribusiness,” he said.