Lakeland Dairies profits increase by 52%

Ireland’s second largest dairy processing co-operative Lakeland Dairies has reported an 18% increase in revenues to €472 million and a 52% rise in operating profit to €6.85 million for the year ended December 31, 2011.

Ireland’s second largest dairy processing co-operative Lakeland Dairies has reported an 18% increase in revenues to €472 million and a 52% rise in operating profit to €6.85 million for the year ended December 31, 2011.

“While global economic and trading conditions continued to be difficult, it has been an excellent year for Lakeland Dairies where we are benefiting from our recent investments in advanced processing capabilities together with focussed and intensive business development activities,” remarked Chief Executive, Michael Hanley.

Lakeland Dairies exports to over 70 countries offering some 170 branded dairy products to customers throughout the world. In 2011, Lakeland processed over 700 million litres of milk into a range of value added dairy foodservice products and food ingredients.

The turnover figure of €472m was underpinned by strong sales, a maximised milk processing throughput, enhanced logistical capabilities and an ongoing operational efficiency programme across the organisation. This contributed to a further strengthening of the balance sheet with shareholders’ funds of €81m at year-end.

Foodservice performance was strong with a 13% increase in revenues to €146m driven by a renewed business development programme, moderate margin improvements and higher sales to our extensive client base compared to the previous year.

Food Ingredients revenues increased by 21% to €282m driven by continuing strong global demand where we are well positioned in international markets as a leading European provider of high quality dairy ingredients, with multiple product lines in the milk powders, proteins and butterfats categories.

Agri-Trading Turnover increased by 13% to €44m boosted by increased sales in line with generally positive dairy market conditions. Lakeland supplied over 140,000 tonnes of high quality feeds during the year to its milk producers, independent stores and farmers throughout its fifteen county catchment area.

Michael Hanley, Chief Executive, Lakeland Dairies commented, “In addition to new product developments, we enhanced our links with strategic international distributors and business partners to create further growth and development opportunities for our extensive foodservice products range.

“We have invested further in our supply chain to ensure logistical excellence in delivery to customers. This is underpinned by advanced processing technologies and research and development in direct co-operation with customers. By sector, we have built strong relationships with leading multinational corporations including applications for our ingredients in infant nutritionals, confectionery, cream liqueurs and retail food products.

“Trends driving the growth in food ingredient sales include the continuing adoption of dairy by consumers in Asian, African and Far Eastern markets and the global trend towards healthier living including the use of functional foods. Our ingredients are known for their high reliability and functionality within the global food industry as is our ability to create bespoke solutions for key customers. Combined with our excellent processing facilities, this capability will be further advanced in the years ahead and will also contribute to the development of new market opportunities as our milk intake expands following the abolition of quotas in 2015.

“Overall, Lakeland Dairies expects that it will increase milk intake by 35% at minimum and by up to 55% where reasonable market conditions exist post 2015, when quotas are abolished. It is important that this expansionary sentiment should be linked with a capability to address the milk processing needs of milk producers, combined with the most favourable milk price that market conditions will allow. Producers can be assured that Lakeland Dairies is well equipped to handle every future drop of milk that they will send for processing,” concluded Mr. Hanley.