Operating profit at Ornua dropped by 8.2% to €116.8 million in 2023, according to financial results published today (Wednesday, April 24).
Ireland’s largest exporter of dairy products and the owner of the Kerrygold brand reported turnover of €3.39 billion last year, down 0.7% on the 2022 figure of €3.42 billion.
Group Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) for the 12 months ending December 30, 2023 was down by 4.6% to €149 million (2022: €157 million).
The dairy co-op said that the results were a “solid performance”, given the “challenging market conditions that the Irish dairy industry faced in 2023”.
Key performace indicators 2023 € million 2022 € million Year-on-year change Turnover 3,399.9 3,422.4 -0.7% Group EBITDA* 149.8 157 -4.6% Operating profit* 116.8 127.2 -8.2% Net assets 745.1 728.1 +2.3%
During 2023, Ornua said that €1.6 billion worth of Irish dairy products purchased, which it said provided “continued security of strong returns for member co-operatives, and 14,000 Irish dairy farming families”.
In October, Ornua officially opened a new €40 million development at Kerrygold Park, increasing production capacity to approximately one million retail packs per day.
A total of 26 new Kerrygold products and product extensions were launched in key markets during 2023.
Despite the impact of inflation, price fluctuation in branded categories and an unprecedented level of market competition, Kerrygold continued to experience volume sales growth in the US, where it is the second most popular branded butter.
Ornua said that brand premium and bonuses to its member co-ops amounted to a value payment of €74.5 million (€72.5 million in 2022).
During the 12-month period €481.5 million in working capital facilities were provided to support member co-ops.
Ornua
The financial report states that global milk supply fluctuated in the year, rising by just 0.1% overall in 2023.
Global dairy demand rose by approximately 0.5%, following a decline of 0.5% in 2022.
Ornua said that global milk supply “looks likely to remain flat” for the rest of 2024, which should support the market.
“While it is expected that the dairy market will stabilise in the coming months, buyers will need more certainty regarding demand if commodity pricing is to firm in the second half of the year,” it said.
Although markets remain challenging this year, Ornua said that it is “well-positioned to leverage its experience, agility and resilience to deliver consistent growth during challenging times”.
Donal Buggy, Ornua interim chief excutive Ornua said that the group responded dynamically to significant instability in the global trading environment in 2023.
“Looking ahead, while there is continued uncertainty around the impact of macroeconomic factors on already challenging global market conditions, we remain optimistic about the future and focused on achieving sustainable growth in key markets,” he said.
Ornua reported a 12% reduction in Scope 1 and 2 emissions globally in 2023, boosted by its ongoing transition to renewable energy sources across the group network.
It is aiming to achieve a 30% reduction in scope 3 emissions by the end of the decade.
Chief executive
Headquartered in Dublin, Ornua has a global team of 2,900 employees, operating from 10 business units worldwide, including 13 production facilities.
In February 2024, the board of Ornua announced the appointment of Conor Galvin as chief executive of Ornua. He will take up his new role in May.
Conor joined Dairygold in 2014 and has held a number of roles in its senior leadership team before becoming chief executive in January 2022.
Prior to joining Dairygold, he was finance director with DCC’s food and beverage division, while he was also country finance manager with Procter & Gamble in Ireland.