Pre-tax profits at Tirlán increased to €52.2 million in the first year of its transition to a 100% farmer-owned cooperative, according to financial results published today (Wednesday, May 10).
In its first set of annual results as Tirlán, the Kilkenny-headquartered co-op reported a turnover of €3.06 billion against the backdrop of what Tirlán’s chair, John Murphy, described as a year of “unprecedented volatility and sharp inflationary increases”.
Murphy said 2022 was a “milestone year” for the co-op which has 4,327 dairy farmer members, 689 grain farmer members and more than 2,300 employees.
Tirlán recently marked a year since the transaction was completed to acquire the remaining 40% of Glanbia Ireland from Glanbia plc., to create the 100% farmer-owned co-op.
It was the largest acquisition by an Irish company last year.
Murphy said the co-op was now “firmly established” and the fact it was a fully farmer-owned business would give it “flexibility to support our farmers while maintaining robust financial discipline”.
“When we launched our proposal to take complete ownership of the Glanbia Ireland business, our main objective was clear: To pay the best possible price for our farmers’ milk and grain.
“In 2022 we paid an average milk price of just over 63c/L (including VAT) with a strong position achieved in the comparative milk price leagues,” he stated.
“We also paid record prices for grain, with €310/t for green barley and €320/t for green feed wheat,” Murphy added.
He said Tirlán’s members also “benefitted from a spin-out of around 12 million Glanbia plc. shares, distributing a total value of €168 million”.
“In addition, a dividend of over €6.5 million was paid to our farmer members,” Murphy outlined.
In total, the co-op paid €2 billion for grain and milk last year; out of this, €1.9 billion was paid to farm families for milk in 2022.
Murphy acknowledged that a “major challenge” for a large number of Tirlán milk suppliers in 2022 was the fact that they had a significant proportion of their milk supply contracted in fixed milk-price schemes.
He said the board had “allocated a large amount of time and significant resources to alleviate the serious challenge facing some milk suppliers”.
“Support payments were made to all suppliers who were in fixed milk-price schemes and in particular targeted at those with in excess of 35% of their annual milk supply volumes committed to fixed milk price schemes,” he added.
The co-op highlighted in its annual report that “as a result of strong sustainability actions”, the average carbon footprint for Tirlán milk suppliers last year was 0.91kg carbon dioxide (CO2) equivalent per kg of milk – a 7% reduction since 2018.
The latest financial results highlight a strong performance across the co-op’s three key business categories: Agribusiness, Consumer, and Ingredients.
Its annual report also showed that Tirlán’s group earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped by 21% to €116.3 million.
At its next annual general meeting (AGM) later this month the board of the co-op is proposing that its members approve a share interest payment of 19.058c/share, (totaling €6.5 million), which will be payable to members on the share register at that date.
This represents an increase of 10% on the previous year’s payment.
According to Tirlán, 2023 is “proving challenging to date”.
It highlighted today that there has been “a significant reduction in dairy market returns, combined with high farm-input costs and supply chain inflation”.
But Tirlán’s chair said the co-op “is hugely ambitious for the future”.
“For 2023, our objectives are very clear: Pay the best possible price for milk and grain,” Murphy said.