A “significant fall-off” in milk prices and a decline in fertiliser sales saw operating profits at the dairy co-operative behind Connacht Gold butter plunge in 2023 amid challenging conditions for the dairy industry at large.
In full-year results published on Wednesday, Aurivo, which also operates under the Donegal Creameries brand, said it paid its members an average of 41.1 cent per litre of milk, a decline of almost 30 per cent from 2022 when it paid an average 61.4 cent per litre.
Milk commodity prices have fallen dramatically on global markets from an all-time high last year, seemingly due to falling demand for dairy products from China, Southeast Asia and Japan.
Against this backdrop, Aurivo said it “endeavoured to support the milk price throughout 2023 for its dairy farmers”, which contributed to a 71.6 per cent decline in operating profits from €17.8 million in 2022 to €5.1 million last year.
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The co-op also experienced a decline in demand for its fertiliser products, it said, largely due to a weather-delayed start to the spreading season last year and falling fertiliser commodity prices generally. This shrank revenues at Aurivo’s agribusiness unit by 13.9 per cent to €16.7 million in the year. Group turnover, meanwhile, declined by 16.4 per cent to €638.6 million in the year.
Aurivo chairman Raymond Barlow said 2023 had been a “tough year” for the co-op.
“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,” said Donal Tierney, chief executive of Aurivo.
“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. Our focus continues to be on the delivery of ongoing value to our members, customers and the communities we serve and operate in.”
Meanwhile, Connacht Gold sales increased by 14 per cent in the year and have now expanded by close to one quarter since 2021, Aurivo said. The co-op also completed the acquisition of Arrabawn’s liquid milk and butter van sales business, bolting it on to its consumer foods unit where revenues were essentially flat year-on-year at €137.5 million.
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