Dairy co-op Aurivo reports strong year despite ongoing pandemic
Sales increase a record 9.4% and operating profits surge at Connacht Gold producer
Aurivo established a milk stability fund of €3 million last year. Photograph: iStock
Sligo-based dairy co-op Aurivo said its business delivered a strong financial performance in 2020, despite the ongoing pandemic, achieving record sales and increasing its operating profit significantly.
The dairy, which includes the Connacht Gold and the Donegal Creameries brands in its product line-up, said sales rose 9.4 per cent to €488.7 million, with operating profit before exceptional items increased to €8.5 million, up 170 per cent.
The 2019 figures included exceptional costs of €6.4 million, which comprised an impairment charge of €5.96 million on goodwill in its For Goodness Shakes brand, €1.3 million in restructuring costs, and settlement gains on its defined benefit pension of €868,000. Exceptional costs for 2020 were €152,000.
Group earnings before interest, taxation, depreciation and amortisation (ebitda) were €15.1 million, up almost 70 per cent year-on-year.
Its consumer foods turnover was just under €97 million for the year, a rise of 1.9 per cent.
The sector of Aurivo’s business worst hit by Covid-19 was My Goodness Limited, its sports nutrition business, as remote working and the notable reduction in footfall across cities in Ireland and Britain ate into sales volumes significantly in 2020. The company said indications of a sales recovery post-lockdown have proven positive, with volumes increasing as restrictions were lifted across its primary markets.
Dairy ingredients saw turnover rise 17 per cent to €198 million, with the division reaping the benefits of an investment in a new spray dryer in 2019. The new dryer produced 25,000 tonnes of various grades of enriched milk powder ingredients, contributing to the ability to process 35 per cent extra milk per week.
The dairy’s agribusiness turnover was 11.2 per cent higher at €27.9 million. Aurivo’s milk pool for 2020 grew 5.5 per cent to 477 million litres, with the average price paid for milk in 2020 35.61 cent per litre, up from 34.35 cent per litre. Aurivo also established a milk stability fund of €3 million, which will help its milk supply base manage market volatility in the future.
Net debt was cut to €2.2 million from €18.8 million.
“Aurivo has reported a strong and resilient set of results for 2020, in what was a uniquely challenging year. Against the backdrop of a global crisis, the hard work and agility of our employees, suppliers and members enabled the co-op to maintain essential supplies, services and food products across domestic and global markets,” said Donal Tierney, chief executive of Aurivo.
“While we expect pandemic restrictions to ease during 2021, its ongoing impact, however, will ensure another year of uncertainty and global disruption.”