Lakeland Dairies reports profits

Lakeland Dairies of Northern Ireland has reported increased profits for the year ending 31 December 2016. In spite of difficult dairy market conditions, Lakeland turned in a very robust performance with revenues up by 2% to £514.6 million (€608.3m), yielding an operating profit of £6.2 million before exceptional costs, and EBITDA of £16.2m. Lakeland Dairies closed the year with a strong balance sheet and shareholder’s funds of £87.3 million (€103.2m).

Lakeland Dairies operates across 15 counties on a cross border basis, and has a portfolio of 240 different dairy products, which it exports to 80 countries worldwide, much of it through its logistics centre in Northern Ireland.

Lakeland Dairies acquired Northern Ireland’s Fane Valley Dairies in May 2016, increasing milk intake by 22% to 1.1 billion litres. The continuing benefit of this additional milk flow, together with generally increasing milk supplies, will take full effect in the current year as intake rises to 1.2 billion litres of milk.

The Food Ingredients Division performed strongly in a challenging year with revenues increasing by 9% to £302.7m. The acquisition of Fane Valley Dairies contributed substantial extra milk volumes for processing, helping to meet consistent demand for a wide range of dairy food ingredients.

Bailieboro Dryer No. 3 (Milk Powder Plant) in the Republic of Ireland was completed and commissioned in time for the peak milk production season, including new robotic systems, along with an overall efficiency upgrade across the entire processing footprint. Lakeland Dairies continued to build on its strengths as a major provider of ingredients to the infant formula and nutritionals markets. It is now able to produce over 160,000 tonnes of milk powders a year and over 50,000 tonnes of butter on a single site.

Foodservice Revenues of £166.1m include a reduction of 3.8% from the previous year which is primarily due to pricing sensitivity in an intensely competitive market climate. The overall volume of sales remained positive where Lakeland has a diversified and innovative product mix, adding further value to every litre of milk processed.  The co-operative’s major new Global Logistics Centre in Newtownards, county Down played an important role meeting customer demand in key market segments including hospitality, catering and convenience, using highly automated systems with maximum effectiveness and efficiency.

Michael Hanley, group chief executive, says, “After going through a sustained period where international dairy markets have been very volatile, the market has become somewhat stronger, however its continuing strength cannot be predicted. We want our milk producers to see the best possible and most sustainable returns from their dairying. With the strategic investments we have made, we are able to process as much milk as our suppliers can provide. We are now processing milk into 240 different products which gives us great flexibility in our approach to meeting market needs.”

Related content

Leave a reply

Dairy Industries International