GLANBIA PREPARES FOR MILK QUOTA END - Results out this morning from food group Glanbia show its operating profit grew by 22% to €166.8m in 2011 and its revenue jumped 26% to €2.7 billion.
2011 was a positive year for global dairy markets following a good year in 2010, but the group predicts some weakness in Ireland in 2012.
Glanbia says it was another difficult year for the food retail market in Ireland, with consumer sentiment falling sharply towards the end of the year. Its statement says the Irish economic and fiscal backdrop offers little respite at present to consumers and as a result these market conditions are expected to persist in 2012.
Glanbia managing director John Moloney said he expected dairy markets in 2012 to be "somewhat softer, but not exceptionally so", adding that he expected strong growth beyond 2012, especially in Glanbia's nutritionals business.
He said the removal of EU milk quotas in 2015 was "a significant opportunity" for Ireland, which had been subject to milk limits since 1984.
Mr Moloney said the opportunity was founded on growth in developing economies, which would boost consumption. He said Glanbia was still working on plans and looking at options for a new milk processing plant to handle this demand.
The Glanbia chief said there was a "good debate" going on, and talk of differences at board level on the plans was "speculation".
Asked about an IFA suggestion that Glanbia and Dairygold should link up, Mr Moloney said the two already had successful asset-sharing arrangements. He said the issue was no longer about competing within Ireland, but worldwide, and Glanbia was interested in talking to people with a contribution to make to that.
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BANKS TO TAKE OUT MORE ECB CASH - The European Central Bank today offers European banks a second bite at three-year long-term refinancing.
This is the LTRO - or long-term refinancing operation. The first one, last December, put €489 billion of liquidity into euro zone banks.
Distressed French, Italian and Spanish sovereign bond yields began to move significantly in the right direction after the LTRO.
John Finn of Treasury Solutions said the money was intended for banks to lend into the economy. But he said it was used to help banks restructure their balance sheets. Some went back into deposits with the ECB, while some banks re-invested the money in Government bonds at higher rates.
Asked about IL&P's increase in impairment charges for last year due to higher mortgage arrears, he said the problem would have to be sorted out within 12 months, as ECB rate hikes were then likely to worsen the arrears issue.
