United Dairy Farmers has posted a “solid” rise in annual profits despite falling milk prices causing overall revenues to drop.

Northern Ireland’s largest dairy company, and owner of Dale Farm and Dromona cheese, said its pre-tax profits in the year to March 31 rose to £4.5m, up £2.6m from a year earlier. That was despite a 9% fall in group turnover to £333m.

Its chief executive, David Dobbin, described the figures as “a solid set of results in very challenging markets”, driven by a strong performance in Dale Farm’s products and helped by falling interest, energy and input costs.

“Having seen commodities lead the market up in 2007/8, returns from commodity markets continued their steep decline in 2008/9 with consumer products regaining their traditional premium in the marketplace.

“Dale Farm has continued to pursue its strategy of growing in value, with cheese output more than doubling in the year and record sales in consumer products and food ingredients offsetting a decline in commodity milk powder sales,” he said.

Consumer product sales also offset £1.25m that United said it spent providing support to alleviate low farmer milk prices during its financial year. Recent signs of recovery in international dairy markets and local farmgate milk prices provide some optimism for the future, said Mr Dobbin.

Harold Hamilton, United Dairy Farmers’ chairman, added: “Based on the improvement in results over the previous year I am pleased that the board has approved an allocation of bonus shares totalling almost £1m to members. This will be at the rate of one share per 1,000 litres of milk supplied to United in 2008/9, double the rate of the previous year.”