LAKELAND Dairies, the largest cross-border dairy processing co-operative on the island of Ireland, has announced results for 2021, with increased revenues and operating profit, while paying a competitive milk price to milk producers throughout the year.
Farmer owned Lakeland Dairies collects 2bn litres of milk from 3,200 farm families across 16 counties in Northern Ireland and the Republic of Ireland. The co-operative has a portfolio of 240 different dairy products made on 8 highly efficient processing sites which it exports to over 80 countries worldwide.
Lakeland Dairies’ revenues increased by 20% to £1.09bn across its four operating divisions of Food Ingredients, Foodservice, Consumer Foods and Agribusiness. This yielded an 8% increase in operating profit to £23.6m, and EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) of £46.4m.
Lakeland Dairies closed the year with a strong balance sheet including Shareholders’ Funds of £193.4m.
Food Ingredient revenues increased by 20% to £696.6m, based on consistently strong demand for the co-operative’s functional and enriched powders, proteins and dairy fats throughout the year. Lakeland Dairies produced over 280,000 tonnes of milk powders and butter in 2021, representing a 12% increase in volume shipments.
Foodservice revenues increased by 23% to £187.6m, which was robust considering that global foodservice markets continued to suffer from volatility and disruption due to the pandemic throughout 2021.
Consumer Foods experienced a 16% uplift in revenue at £142.6m, including organic growth and increased uptake of dairy by consumers in the retail grocery sector in 2021.
Lakeland Agri increased revenues by 14% to £72.5m for the year, based on a strong performance with feed sales volumes of 218,000 tonnes and fertiliser sales increasing by 19% over the previous year.
Lakeland Dairies Group Chief Executive Michael Hanley said the results reflect prudent management in the context of an intensely competitive and increasingly volatile trading environment:
“The financial results and accounts for the year are both prudent and satisfactory. This is particularly so in the context of an intensely competitive trading environment, when the achievement and maintenance of strength, sustainability and resilience have never been more important for globally focused businesses. This enabled Lakeland to pay a competitive milk price, also reflective of overall market conditions, throughout the year.
“The world needs high quality food. This demand is growing and dairy provides the solution. We are therefore concentrating on our long-term global contribution and value-growth through the strength of our market presence and the robust quality of our supply chain. We will continue to innovate in everything we do to ensure the future sustainability and success of our business in the interests of the milk producers and customers who we serve.”
“We are focused on a sustainable future and the creation of further value for our dairy farmers. We expect relatively stable dairy market conditions through 2022 albeit there are significant challenges in our operating environment, including inflationary pressure on all costs, as economic uncertainty in light of the pandemic and geopolitical issues persist.”
Lakeland Dairies’ Chairman, Niall Matthews said: “We operate in a complex global environment and marketplace where the pace of our innovation, and our operational and business performance, must constantly adapt to meet a very wide range of trends and imperatives for the short, medium and longer terms.
“The 2bn litres of milk produced by our dairy farmers is manufactured into the highest quality, natural and wholesome dairy products, creating long-term value for our dairy farmers and our customers throughout the world. The economies of scale we have achieved and the robust performance of our business will continue to support our progress, building further on our strengths as a large scale, farmer owned dairy co-operative.”
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