Irish dairy giant reports record revenues of £1.8bn
Kerrygold owner Ornua, Ireland's largest exporter of dairy products, has announced record revenues of €2.1bn (£1.8bn) for 2017, an 18% increase year-on-year.
Operating profit at the group, which is funded by 33 dairy co-ops, was €35m (£30.5m), up almost a third on the 2016 performance, according to the group's financial results published today. Meanwhile profit before tax increased by 84% to €29.1m (£25.4m).
The performance was driven on the back of a record year for Kerrygold in Germany and the US, were the brand recorded double-digit volume growth in each market.
During the year, the group expanded its German production facility, with total investment in the facility now standing at €60m, while in North America, Ornua reported a record year for its ingredients division.
Describing 2017 as "a year of significant growth" Kevin Lane, chief executive of Ornua, said that the group's financial performance for the year was "excellent."
"Product innovation continued at pace and allowed us to unlock new routes to the market to ultimately drive value for our members, Ireland's dairy processors and Irish farmers," Mr Lane said.
The group purchased 338,000 of product from members - a record year, and the group said that it "paid strong product prices for those".
Ornua said that it was trying to reduce increasing volatility in the markets, and "from that point of view we have increased our volumes that are managed under fixed price contracts, we have also increased our trading expertise in-house that is to enter into the derivatives markets and also physical trading to try and reduce the volatility that our members are experiencing".
Overall, the group launched 34 new product innovations in 2017, including a Kerrygold shredded cheese range in Germany.
In the UK, Ornua acquired and integrated F.J. Need (Foods) in Nantwich, England into group operations, and expanded the business's production capabilities in order to "strategically build scale at a time of uncertainty for the UK market." The results mark the first year of Ornua's new five-year growth plan, 'Ornua 2021', which aims to position the business as a leading global dairy organisation. The group said it is reviewing measures to help minimise any potential negative impact of Brexit.