Milk processor Aurivo has seen its operating profit decline by 71.4% in 2023 to €5.1 million, down from €17.8 million in 2022.

Aurivo’s revenue for 2023, meanwhile, declined by 16.4% to €638.6 million, compared to the 2022 record figure of €764.2 million.

In its full year financial results, for the year ended December 31, 2023, the dairy business said that the decline in revenue was primarily related to the sharp deterioration in dairy commodity prices experienced throughout 2023, as well as a reduction in the volume of external milk processed, and a 39% reduction in fertiliser volumes sold.

The decline in operating profit, the business said, was partially down to the prices paid to farmers for milk, set against the lower revenue.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for 2023 were €14 million, a drop of 43.8% on the €24.9 million figure for 2022.

Aurivo acknowledged that 2023 was an “extremely challenging year”, but that its performance had been “robust”, with the business investing €26.6 million in capital projects and a strategic acquisition in its liquid milk business.

According to the annual figures, Aurivo paid an average milk price throughout 2023 of 43.1c/L, down almost 30% from the 2022 average figure of 61.4c/L.

In terms of the business’ divisions, decreases in turnover were seen in dairy ingredients (down 30.6% from €340.4 million to €236.3 million) and agri-business (down 13.9% from €187.7 million to €161.7 million).

The agri-business division was hampered by challenging weather conditions delaying the beginning of the fertiliser spreading season last year, which was further compounded by a “rapid and continued decline” in fertiliser commodity prices.

The Aurivo marts turnover, as well as the consumer foods turnover, saw slight increases, of 4.2% (from €98.9 million to €103.1 million) and 0.3% (from €137.2 million to €137.5 million) respectively.

The business invested €17.8m on capital expenditure in 2023, bringing its investment programme to €61.4 million since 2019.

It also saw the acquisition of Arrabawn Co-Op’s liquid milk and butter van sales business for €8.8 million.

The business had 30 new entrants to dairy in 2023, with its total milk pool standing at 509 million litres, a drop of 1% on 2022. Aurivo said this represented a “strong performance” in light of the national average decline in milk volumes of 4.1%.

Aurivo said it expected to take on 20 further new entrants in 2024.

Commenting on the 2023 financial results, Aurivo chief executive Donal Tierney said: “Notwithstanding the impact of the global challenges on Aurivo’s financial performance for 2023, the co-op remained absolutely committed to its strategic priority of building a sustainable future for the business, and delivered a robust performance for the year.

“The year under review was one of both continued investment in the business and support to our members in very challenging circumstances,” Tierney added.

“While we envisage that 2024 will be a better year for both Aurivo and the sector, we will continue to manage the business prudently, supporting our farmer members and making effective and necessary investment for the future.”

Raymond Barlow, chairperson of Aurivo, said “2023 was a tough year for Aurivo. However, our resilience and dedication to ensuring a strong, sustainable co-op ensured a robust performance. My thanks to our farmers, employees and customers for their ongoing support.”