Irish Dairy Board reports strong results
The Irish Dairy Board (IDB) today, announced increased turnover of 5% to over €2.1 billion, with earnings before interest and taxes (EBIT) up 25% to €25.8 million.
Its operating surplus was up 25% to €25.8 million, and it recorded net assets of €417 million and that it was debt free at the year end with €51.9 million cash reserves.
According to the IDB, this leaves it well positioned for expansion post milk quotas and to deal with this it has new sales and marketing teams in Russia, China, Saudi Arabia and South Africa.
The year also saw record sales for its main brand, Kerrygold. It remains the number 1 butter sold in Germany, and the number 1 imported butter in the US.
Commenting, Kevin Lane, IDB CEO, said: “I am pleased to report a very strong business performance in 2013, combining solid earnings growth across all divisions and enhanced product returns to our members. Our continuing investment in brand growth, New Product Development and in-market expansion is designed to ensure that our members and suppliers can expand on the basis of sustainable market demand.
“The abolition of milk quotas in 2015 will present the Irish dairy industry with its first opportunity for meaningful expansion in the past 30 years. Our strategy is to ensure that IDB members and dairy farmers are optimally positioned to participate in this expansion opportunity through enhanced routes to market and sustainable, market led products.”
He said 2013 was a dramatic year for global dairy markets, with a drought in New Zealand and a prolonged winter in Europe during the first quarter resulting in a reduction in milk output levels in the first half of the year compared to 2012. This relative milk scarcity occurred in the face of tight stocks and very strong emerging market demand, particularly in China, he said. It took the full year before the EU and New Zealand managed to climb above the previous year’s levels. Milk scarcity in the face of strong demand caused prices to rise quickly in early Q2, with Whole Milk Powder prices rising more than 60% between January and April 2013 on the GDT. EU prices were up more than 25% on average over 2012 levels for Butter, Skim Milk Powder and Whole Milk Powder, with returns for commodity cheeses up in the region of10%.
The IDB also announced details of a new €30 million investment that will create 50 new jobs in Mitchelstown, Co. Cork. The 50,000 tonne capacity, fully integrated butter production and packing facility will also serve as an innovation centre for Kerrygold which has ambitious expansion plans post the abolition of milk quotas in 2015.