Dairygold has announced its financial results for 2021, reporting a “strong performance” across a number of indicators.
The business delivered a “record” turnover of €1.17 billion, an increase of 15% or roughly €152 million on the 2020 figure, with an operating profit of €30.4 million, reflecting an increase of €4.4 million.
These results reflect a “robust performance” across all of Dairygold’s activities, despite the ongoing challenges of the Covid-19 pandemic, the company said.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) totalled €57.6 million, an increase of €3.8 million, reflecting “the increased level of profitability in the core business, benefitting from a stronger trading performance, including increased sales volume and improved efficiencies”.
The company’s bank debt decreased by €11 million in 2021 to €108.2 million.
At the end of 2021, the net asset value of the business stood at €422.2 million, an increase of €34.5 million on 2020, according to its financial results.
Dairygold noted that markets “remained buoyant” throughout 2021, due to a combination of low global milk supply in the main exporting regions and strong international demand, in particular from China.
However, the processor warned that, for the remainder of 2022, the profitability across the value chain will be challenged due to the cost and availability of several inputs for both suppliers and the processor, including fertiliser, energy, packaging and raw materials.
Dairygold’s dairy business’ turnover increased by €112 million to €871.6 million, driven by increased sales volumes and strong dairy market returns. Dairygold collected and processed 1.49 billion litres of milk in 2021, a 4.2% increase on 2020.
The processor said that the strategic focus of the dairy business has shifted from capacity management and infrastructure investment to higher margin processing and “adding value to the litre of milk, in as sustainable a way as possible”.
In 2021, the co-op formed a health and nutrition business, while the focus for its two foodservice operations in the UK and Germany is to continue mitigating the impact of the pandemic. Dairygold said that its UK operation is well placed to continue to grow market share there.
Dairygold said its agri-business division delivered a “very strong performance across all activities” in 2021, with its turnover increasing by €32.3 million to €276.2 million.
The company also said that it would invest in upgrades to its point-of-sale system at its 26 Co-Op Superstore branches to enhance customer experience.
On the sustainability front, Dairygold noted that the 17 recommendations contained in the interim report from the Food Vision Dairy Group “should serve as a solid pathway for action, allowing processors to work together with milk suppliers to identify actions that can be taken”.
The business said it is continuing to engage in emissions reduction activities, nutrient planning and watercourse protection programmes.
Commenting on these yearly results, Dairygold chief executive Conor Galvin said: “The Dairygold business is in a good financial and operational position. Following a decade of significant capital investment, the business has a strong EBITDA, manageable debt and a successful model for member funding.
“Our focus has shifted from milk expansion to creating more value per litre of milk. We are currently conducting a business-wide strategy review which is expected to be completed by the end of April.
“This strategy will provide an updated roadmap for the business for the next five to 10 years, as we seek to continue to maximise returns for our members,” Galvin added.
Dairygold’s chairperson John O’Gorman noted: “As we emerge from Covid-19, we see the fragile geopolitical situation in Europe as a result of Russia’s invasion of Ukraine.
“The ongoing invasion is presenting supply chain issues and directly impacting input costs for our members. We will continue to identify mitigation measures that will be effective in addressing such issues for our members,” O’Gorman added.