Co Sligo-based co-op Aurivo, which owns and produces the Connacht Gold dairy brand, today reported lower profits and revenues for 2023 after what it called "an extremely challenging year" for it and the wider sector nationally.
Aurivo said its group operating profit sank by over 71% to €5.1m last year from €17.8m in 2022, while its revenues for the year were down 16% to €638.6m from the previous year's record of €764.2m.
It said the lower revenues were mainly due to the sharp deterioration in dairy commodity prices seen i 2023, a reduction in the volume of external milk processed and a 39% reduction in fertiliser volumes sold.
"The business endeavoured to support the milk price throughout 2023 for its dairy farmers, and this gave rise to a significant decline of 71.6% in operating profit in 2023," the co-op said.
It said that the average milk price for the year was 43.1 cpl, down almost 30% on the price of 61.4 in 2022.
Meanwhile, its milk pool stood at 509 million litres in 2023, a decline of 1% on 2022. But it added that this represented a strong performance against a backdrop of Irish milk production that declined by 4.1% nationally.
Aurivo added that despite the significant challenges of high inflation, geopolitical tensions and declining commodity prices, it invested €17.8m on capital expenditure, which brought its investment programme to €61.4m since 2019.
Breaking down its divisions, Aurivo said its Consumer Foods unit reported a strong year in 2023 with revenues flat at €137.5m.
In the last quarter, Aurivo completed the acquisition of Arrabawn's liquid milk and butter van sales business, which it said strengthens its position in the Irish liquid milk sector and enhances the efficiency of its production facility in Killygordon, Co Donegal.
Connacht Gold retail butter sales volumes grew by 14% in the year and by 23% since 2021, making the brand a clear number two in the market to Aurivo's partner brand, Kerrygold.
Liquid milk sales grew by 10% in 2023 while branded milk sales grew by 16%. It said its For Goodness Shakes sports nutrition business and brand performed well last year, adding that it is optimistic for growing the brand further in 2024.
But due to exceptionally difficult dairy market conditions, Aurivo said its Dairy Ingredients business experienced a very challenging year in 2023.
It said that while overall performance was impacted as a consequence, the result for the year was in line with expectations after the decision to support farm gate milk price in so far as it could during the year.
Dairy Ingredients revenues were down by 30.6% on the previous year to €236.3m from €340.4m in 2022.
Aurivo said its Agribusiness experienced a mixed year in 2023 and revenues declined by 13.9% to €161.7m. It said its Homeland stores delivered another consecutive year of increased retail footfall and sales growth across a diverse range of product categories.
The Co-Op also said that spring and summer of 2023 were challenging due to a weather delayed start to the fertiliser spreading season.
"This coupled with a rapid and continued decline in fertiliser commodity prices resulted in a significant impact on the overall performance of the Agribusiness unit," it stated.
It added that its commitment to invest in increased processing and packing at its feed mill in Ballaghaderreen was a key enabler for the continued growth of its Nutrias and Goldstar brands.
Aurivo said its marts division had a strong year in 2023 despite a small reduction in the number of livestock sold (0.8% in cattle, 2.2% in sheep). Throughput at the end of the year stood at over 76,000 cattle and 65,000 sheep and it noted that the average price for cattle up marginally on 2022.
Donal Tierney, chief executive of Aurivo, said that notwithstanding the impact of the global challenges on Aurivo's financial performance for 2023, the Co-Op remained "absolutely committed" to its strategic priority of building a sustainable future for the business, and delivered a robust performance for the year.
"The year under review was one of both continued investment in the business and support to our members in very challenging circumstances," Mr Tierney said.
"While we envisage that 2024 will be a better year for both Aurivo and the sector, we will continue to manage the business prudently, supporting our farmer members and making effective and necessary investment for the future," he added.
