Tipperary-based milk processor Arrabawn appeared to buck the global dairy market slump last year, reporting record financial results.
The co-op posted record Ebitda (earnings before interest, taxes, depreciation, and amortisation) and operating profits of €19.1 million and €10.8 million respectively despite a significant slide in dairy prices internationally. The group’s operating profit was 12.5 per cent up on the previous year.
Falling dairy prices saw turnover fall by 20 per cent to €403 million, however.
Weaker market returns predicated on excess supply and declining consumer demand has hit the earnings of most big suppliers.
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Lakeland and Aurivo both reported a fall-off in earnings and operating profit on Wednesday following on from Dairygold last week.
“After the exceptional year in 2022 for dairy markets, 2023 proved much more challenging with a drop in dairy commodities, in particular,” chief executive Conor Ryan said.
“Turnover was down as a result, but the value add from our record investment programme was reflected by the record Ebitda and operating profit, both excluding exceptionals. This is a very encouraging outcome,” he said.
Arrabawn also said it generated a once-off profit of €4.3 million from the sale of its liquid business in Kilconnell last year, an exceptional item, not recorded in either Ebitda or operating profit. The group also completed a €3 million extension to its Dan O’Connor Feeds mill in Limerick in 2023.
Arrabawn’s balance sheet was improved with shareholders’ funds increasing by €11.5 million, a 51 per cent increase on five years ago, while net debt brought about by the investment programme is now down from a high of €45 million in 2019 to €10.3 million last year, a decrease of €13.8 million on 2022 “and now at pre-expansion levels”.
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