Source: Ornua 

The Irish dairy co-op and Kerrygold owner saw turnover grow by by €918.3m to €3.4bn in 2022

Kerrygold owner Ornua saw turnover rise by 36.7% last year, but in the face of rising inflationary pressures across the dairy sector, operating profit fell by 17.2%.

The Irish dairy co-op – the parent of Pilgrims Choice owner Ornua Foods UK – saw sales climb by €918.3m to €3.4bn in 2022, its annual report and accounts, published today, revealed.

“A robust and resilient” trading performance, driven by strong global sales (particularly in Germany, the US and the Middle East) helped the business grow turnover by such a big figure, Ornua said.

Kerrygold, which celebrated its 60th anniversary in 2022, now sold 11 million packets of butter and cheese globally each week, it added. The brand’s growth had been bolstered by the launch of 16 new Kerrygold products and product extensions in its key markets over the course of the year.

But in the face of a 40% rise in its farmgate price last year and soaring production costs, Ornua took a significant hit to its profitability. Operating profit – before exceptional items and its bonus-based Ornua Value Payment to its member co-operatives – fell from €153.7m in 2021 to €127.2m, while EBITDA dropped by 11.5% to €157m.

These falls were a result of Ornua seeking “to balance high product prices paid to our member co-operatives, while also maintaining and growing market share”, it said.

However, it also stressed the value payment – given to the 14,000 Irish farming businesses it represented in the form of monthly and year-end cash bonuses – stood at a “historically high” €72.5m, reflecting the returns from strong product prices over the year.

Elsewhere, Ornua achieved a 4% reduction in Scope 1 and 2 emissions, with a further 6% reduction expected this year, it predicted, while the expansion of its Kerrygold Park factory in County Cork would double production volumes – helping it respond to growing demand in global markets.

“Ornua continued to build on its strong and consistent growth trajectory, delivering a robust performance in what was a uniquely challenging year with factors such as rising inflation impacting the entire supply chain,” said Ornua CEO John Jordan.

The business “responded to these shifting market dynamics by remaining focused on our strategy and committed in our efforts to deliver for customers, consumers and our member co-operatives”, he added.

“This is reflected in the exceptional sales performance, underpinned by the hard work and commitment of our 3,000-strong global team,” Jordan said.

“We are very optimistic for the future of our brands and our business, supported by a newly-remodelled five-year strategy, focused on addressing emerging challenges and opportunities to drive sustainable growth in key markets, ensuring we continue to deliver value for our member co-operatives and the 14,000 Irish dairy farming families we represent.”