DUBLIN: Dairy exporter Ornua generated record sales of €2.5 billion last year following the lifting of EU milk quotas.
The co-op, which exports 60 per cent of the State’s dairy output, however, said a combination of strong supply and demand weakness had led to a fall in global dairy prices.
“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,” it said.
Ornua, formerly the Irish Dairy Board, reported an 18 per cent increase in core earnings (ebitda) to €58.8 million. Sales of its leading Kerrygold butter brand hitting a record €740 million.
The group has been on a major expansion drive in the last 18 months.
It has opened new production facilities in Germany, acquired a dairy plant in Shanghai, developed an innovation hub in Spain and opened offices in South Africa.
The investments are part of a five-year transformation strategy designed to ready the co-op for the post-quota era, which has already been marked by crashing milk prices.
Reflecting its strong performance for 2015, a €14 million annual bonus, up 17 per cent on 2014, was declared to Ornua’s 1,400 members, including a cash element of €10 million.
The group ended the year with net debt position of €17 million, and some €526 million of assets on its balance sheet, up 21 per cent on previous year.
An additional special cash bonus of €15 million was declared from the gain on the disposal of a majority stake in Ornua’s US distribution business, DPI Specialty Foods, in late 2015.
“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,” Ornua chief executive Kevin Lane said.
“ 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.”
