Profits down at Donegal Creameries

Profits at Donegal Creameries fell sharply in 2008 due to a decline in the global dairy market, the group said today.

Turnover increased by 3.4 per cent in 2008 from €125.6 million to €129.9 million but operating profits from fell €9.3 million to €5.8 million. Underlying profits were €4.7 million down from €6.1 million in 2007 mainly due to dairy commodity prices and less activity in the property market.

The revaluation of development lands in North Western Livestock Holdings resulted in a loss to the group of €4.7 million.

Turnover in the group's dairy business dropped by 5 per cent to €56.3 million. However, its agri-business division performed well with its seed potato business continuing to flourish and its recently established garden centres also making a useful contribution to full-year results.

Turnover in Donegal's agri-buisness division rose 11 per cent last year to €73.6 million.

A final dividend of 9 cent per share will be paid, an increase of 3 per cent on the 2007 divided.

"The economic climate and outlook have changed significantly in the last 12 months and the group has adapted to meet these new challenges. In the short term, we have to deal with the impact of weak sterling on retail sales in Donegal for both dairy and agri-inputs and a weakening global economy," said Ian Ireland, managing director of Donegal Creameries.

"Food and agri-business will be very resilient as markets come to terms with the current global dynamic and, while the group has short term challenges which will impact on performance and results, we are confident that over the next few years we will develop good sustainable business and continue to deliver value to shareholders," he added.