Dairygold is actively seeking new opportunities to invest in assets that “are not milk dependent”, according to the co-op’s chief executive, Conor Galvin.
The Mitchelstown-headquartered co-op’s latest annual report shows that the turnover from Dairygold’s non-core activities fell in 2022 by €8.6 million to €13 million.
The co-op said this was “primarily due to a decrease in property sales in 2022, versus 2021”.
Dairygold closed the year with fixed assets totaling €432.5 million – a year-on-year decrease of €2.6 million.
It blamed the decrease on “depreciation, amortisation and impairment charges of €29.6 million, a decrease in other investments of €3.8 million, disposals in the year of investment properties of €700,000 and an unfavourable translation adjustment of €500,000”.
However, the co-op said these decreases were partially offset by “capital expenditure investment of €31.8 million and an increase in the investments in joint ventures and associates of €200,000”.
According to the latest set of accounts, the net asset value of the co-op increased during 2022 by €35.6 million to €457.8 million.
Overall, Dairygold reported a record turnover of €1.65 billion last year – boosted by significant increases in dairy market prices which in turn, the co-op said resulted in “a historically high milk price” for farmers.
But its latest set of financial results reflect a mixed performance from its non-core assets outside of milk, both in relation to the co-op’s financial investment portfolio and its investment properties.
The market value of the quoted financial assets decreased by €3.5 million in 2022 to €31.8 million which included €600,000 “transferred from commercial property sales’ proceeds”.
Dairygold said in its annual report that “the decrease in the value is reflective of the general reduction in global equities during the year”.
The latest annual report also details that the co-op sold its FBD shareholding during 2022 and that the proceeds from this sale were re-invested in its diversified financial assets portfolio.
According to the latest financial statements, the co-op held €50 million of non-core property assets by the close of last year and highlighted that one of its key achievements in 2022 was securing dual planning permission from An Bord Pleanála for Creamfields – a major residential scheme in Cork city.
In the latest annual report Dairygold’s chief executive outlined that 2022 was an “extraordinary year for dairy prices” and said although the co-op’s net bank debt rose by €24.1 million to €132.3 million, this was “at a very manageable level, especially given the significant working capital headwinds in 2022”.
Galvin believes this level of debt combined with “new banking facilities of €360 million” will give Dairygold the “headroom to progress its strategic ambition, to invest in higher margin growth opportunities”.