Lakeland Dairies’ revenue surpasses €810 million

Cross-border dairy processing co-operative Lakeland Dairies has reported “an excellent business performance” in 2018.

A statement from the co-operative outlined that the year saw “record revenues and profitability”.

Commenting on the figures, Lakeland Dairies CEO, Michael Hanley, explained: “Group revenues increased by 5.3% from €769.8 million to €810.5 million, yielding an operating profit of €17.5 million – up from €16.8 million in 2017.”

Lakeland Dairies CEO Michael Hanley

Hanley continued: “Lakeland Dairies concluded the year with a strong balance sheet and shareholders’ funds of €130 million, an increase of €12.4 million for the year.

Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) stood at €33.65 million. This represented an increase of €1.05 million in 2018 from €32.6 million in 2017.

The food ingredients division of the entity delivered revenue growth of 4.6% to €489.9 million while the foodservice division revenues increased by 3% to €246.9 million in 2018.

The CEO said: “This is in spite of some volatility including variable consumer sentiment and price sensitivity in key markets which we are managing effectively.”

The entity’s agri-trading division revenues increased by 19% to €73.7 million.

Hanley outlined that this was driven by organic growth where Lakeland customers required higher volumes of feed during the year, mainly due to radically variable weather conditions ranging from blizzards to drought.

The merger

Commenting on the recent merger of Lakeland Dairies and LacPatrick Dairies, Hanley said: “It has recently received all necessary regulatory approvals, following resounding approval by the shareholders of both societies in October 2018.”

The new society – to be called Lakeland Dairies Co-Operative Society Limited – will be the second largest dairy processor on the island of Ireland with a cross-border milk pool of 1.8 billion litres, produced by 3,200 farms across a catchment area including 16 counties.

The new co-op will have a combined annual turnover in excess of €1 billion, creating internationally competitive scale and the opportunity for greater efficiency to be achieved across the amalgamated organisation.

Market conditions

Market conditions for 2019 “will be contingent on factors including the still uncertain impacts of Brexit and the overall balance of global supply and demand across our product portfolio,” the CEO outlined.

“We will meet any potential headwinds by continuing to ensure complete efficiency and flexibility across all of our operations, while at all times paying the highest possible milk price in line with market conditions.

We will always support milk producers to the maximum possible extent.

Concluding, Hanley said: “Let us all re-energise behind the now enlarged enterprise of Lakeland Dairies where, based on the collective achievements of co-operation, we will look forward with confidence to the future.”