Kerrygold owner Ornua has seen operating profit fall 8% amid “challenging market conditions” in 2023.
The dairy company reported a turnover of €3.4bn, which was flat on last year when the company reported a record sales performance.
However, operating profit declined by 8.2% from €127.2m to €116.8m this year, which was “reflective of the challenging market conditions that the Irish dairy industry faced in 2023”, said Donal Buggy, interim CEO at Ornua.
The continued impact of inflation, price fluctuation in branded categories and an unprecedented level of market competition were listed as key challenges by the company.
Despite this, Ornua delivered brand premium and bonuses to its member co-operatives, amounting to an Ornua Value Payment of €74.5m, up year on year from €72.5m in 2022.
Expanding production capabilities
The company also completed its €40m development at Kerrygold Park, which Buggy said “brings the total production capacity of our flagship butter facility to approximately one million retail packs of butter per day”. This is equivalent to doubling the production capacity of the site.
“This growth responds to increased demand for the brand globally, matched by our continued commitment to drive the Kerrygold brand forward towards further success,” he added.
The company said its global ingredients business recorded a balanced performance in the year “despite challenging market conditions”.
It maintained a focus on close collaboration with a diverse customer base to innovate for the future and strengthen the standing of the business as a leading supplier, it said.
It also said there had been fluctuations in global milk supply in the year, which are expected to remain flat in the year ahead and support the market.
Ornua also developed a global ESG strategy in 2023, which is designed to accelerate its efforts to reduce its environmental impact and help it meet its sustainability targets.
“Looking ahead, while there is continued uncertainty around the impact of macroeconomic factors on already challenging global market conditions, we remain optimistic about the future and focused on achieving sustainable growth in key markets,” said Buggy.
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