Ornua, Ireland’s largest exporter of dairy products, has reported that the Group’s sales increased 9% last year on 2014, with sales standing at €2.5 billion for 2015.
This is the first set of results from the Group following the abolition of quotas in March of last year.
In a statement today, Ornua said that EBITDA was up 18% to €58.8m, which includes a €9m increase in brand and market development investment which now totals €45 million, and significant product price support to its members.
The Group closed the year with net debt of €17m and what it says is a very strong balance sheet with net assets of €526m, up 21% on prior year.
Product purchases from members rose by 16% in 2015, to a record 286,000m tonnes. Ornua says that this reflects the impact of the company’s work in opening new routes to market for Irish dairy products and the delivery of strong product price returns.
Kevin Lane, CEO of Ornua, said that the Group is pleased to report a solid 2015 performance across its foods and ingredients businesses.
In the first year following the removal of EU milk quotas and the first year of the Ornua identity, we have delivered growth in existing and new markets.
“We are confident that, whilst recognising the challenging market conditions that exist, our business will continue to deliver strong returns and growth thereby enhancing value for the farmers we represent.”
Reflecting the Group’s strong performance, a €14m annual bonus, up 17% on 2014, was declared to Ornua’s members, including a cash element of €10.
An additional special cash bonus of €15m was also declared by Ornua from the gain on the disposal of a majority stake in Ornua’s US distribution business, DPI Specialty Foods, in late 2015.
Dairy Market Comment
A combination of strong supply and demand weakness led to a fall in global prices in 2015, Ornua said and globally, milk supply grew by over 5% over the January 2014 to December 2015 period while demand only grew by 3%.
As a consequence of this stocks have built and prices have weakened. Ornua maintains that there is an urgent need for global supply constraint and any recovery of demand will be dependent on the Chinese economy, improved oil prices and the lifting of the Russian ban.
Ornua Milk Levy
Earlier this month, in recognition of the on-farm challenges currently experienced by Irish dairy farming families, due to the global dairy market downturn, the Ornua Board decided to suspend the monthly Ornua milk levy from May 1, 2016.
Through the milk levy, Irish dairy farmers directly contribute to the Kerrygold brand and the marketing development of Irish dairy products in over 110 countries.
Notwithstanding the levy’s important contribution to Ornua, it is hoped that the suspension will go some way towards supporting farming families at this difficult time.