Ornua has revealed its operating and financial results for year ended 2019, revealing a “strong performance”, with operating profit up 21.5%.
The results, released today, Wednesday, April 8, show a strong strong trading performance in 2019 for Ornua, with group turnover increasing by 11.5%, reaching €2.3 billion.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at €71.8 million, up 18.7%, and the group’s operating profit stood at €49.1 million, an increase of 21.5%.
This performance was achieved against a backdrop of significant external challenges and places Ornua in a strong financial position to manage the unprecedented challenges presented by Covid-19.
Among the key highlights of 2019 for Ornua was Kerrygold becoming Ireland’s first food brand to reach €1 billion in annual retail sales.
Ornua also purchased 340,000MT of Irish co-op’s dairy products, to a value of over €1 billion.
It also paid out €18.5 million in brand premium for Kerrygold to member co-ops.
Other key highlights of 2019 include:
- Paying a members’ bonus of €26 million – up 37% year-on-year;
- Returning “strong product prices”, securing increased product commitments from member co-ops for 2020;
- Providing €350 million in working capital facilities to member co-ops;
- Purchasing 400 million litres of milk equivalent under fixed price contracts from member co-ops;
- Opening a €30 million pizza cheese production facility in Ávila, Spain.
Commenting on these results, John Jordan, CEO of Ornua, said: “We are pleased to report a strong trading performance for 2019, despite a challenging global environment characterised by economic uncertainty due to US tariffs, Brexit and market volatility.
“Post year-end, this trading complexity has increased significantly due to the impact of the global Covid-19 pandemic,” Jordan highlighted.
Covid-19
Speaking specifically about the Covid-19 outbreak, Jordan commented: “Our key focus for 2020 is to support our 2,400-strong team, our customers, our member co-ops and farmers as we face the challenges of Covid-19 together.
“We are firmly focused on protecting the health and safety of our people; keeping our factories running safely to serve our customers; and ensuring markets for Irish dairy remain open,” he highlighted.
“This will see Ornua carry the risk and cost of stockholding on behalf of our members, going some way towards providing a level of security in these uncertain times,” Jordan argued.
“We are also working hard to maximise Kerrygold premium returns to enable us to continue to deliver strong product prices to our members, and in turn Irish dairy farmers,” he added.
Ornua said that Covid-19 was “severely impacting market sentiment”. Consumer usage has apparently “changed overnight” with people cooking and baking at home.
This is accompanied by a decrease in consumption of dairy products worldwide, Ornua said.
In other ways to keep the supply chain operating, the business has introduced a number of measures.
These include:
- Continuing to purchase product from member co-ops in line with 2020 agreements;
- Keeping all Ornua factories operating and running safely;
- Protecting staff through extensive risk mitigation measures, including minimising the number of people on sites, ending site visits, asking staff to work from home where possible and offsetting shift patterns;
- Maintaining additional storage facilities to spread risk locally and internationally;
- Securing additional international shipping containers;
- Reallocating staff from its ingredients business into its consumer business in order to ensure increased demand can be met.