Donegal Creameries has reported a big drop in profits for the first half of this year, due to tough conditions in the dairy market, lower mushroom profits and adverse foreign exchange movements.
The company reported a pre-tax profit of €862,000, down from just over €4m a year earlier. Revenue, however, rose 13.5% to €68.7m. An unchanged interim dividend of seven cent will be paid.
The company said turnover at its dairy division rose by more than 12% to €31.6m, but there was a loss of almost €1m due to a time lag in passing on increased wholesale prices. Donegal said, however, that dairy volumes were growing, and it expected a return to more 'normal' levels of profit in 2012.
The company received €1.3m in its share of profits from Monaghan Middlebrook Mushrooms, down €1m from a year earlier, but said it saw this fall as temporary.
Finance costs of €1m also affected profits. These were due to increased borrowing costs and currency movements.
Agri-inputs profits almost doubled to €1.1m, on 12% higher turnover of €24.5m. Produce profits also doubled to almost €600,000, with turnover up 21.6% to €12.1m.
For the rest of the year, Donegal Creameries said it expected to make progress on recovering increased dairy costs, and expected a good performance from the agri-inputs and produce businesses.
