Glanbia has reported a 9 per cent increase in half-year pre-tax profits despite difficult conditions in international dairy markets.

Although operating profits were flat at €45.5 million and turnover slipped by 3 per cent to €1.25 billion, pre-tax profits rose to €35.6 million from €32.7 million a year earlier.

Lower borrowing costs, increased efficiencies and a strong performance from its consumer foods division helped boost profits before tax.

"Operational and marketing improvements in consumer foods have delivered the anticipated strong profit growth in this division, offsetting the impact of weak global dairy markets on our Irish food ingredients operations," said managing director Mr John Moloney.

Operating profit in the consumer food division more than doubled to €17.3 million from €7.2 million, making up for the 33 per cent drop in profits in the dairy food ingredients business to €19.3 million.

This division was hurt by the weakness of international markets, which fell to their lowest level for over a decade, Glanbia said.

Although Mr Moloney believes prices have bottomed out, he says it will be the end of the year before there is any sign of recovery.

The group also took an exceptional charge of €75.6 million in the first half, mainly related to the recent closure of its British consumer meats business and the sale of its British food service distribution operation.

The results were also boosted by a reduction in borrowings.

Net borrowings fell by €82 million in the year to the end of June to €307.8 million, knocking 23 per cent off the company's interest bill. It also leaves Glanbia with interest cover of 4.6 times, in line with its stated goal.

Glanbia's finance director, Mr Geoff Meagher, said the company was now able to generate free cash of about €40-€45 million after catering for core maintenance. "That will be available for further debt reduction or for growth," he said.

The company, which is now the largest supplier of pizza cheese in Europe, has earmarked the cheese and nutrition sectors for expansion. It is particularly interested in dairy nutritional products, a market in which it already has a leading position in the US.

Shares in Glanbia, which announced a 5 per cent increase in the interim dividend to 1.96 cents, were broadly unchanged as analysts described the numbers as a "solid set of results". They closed one cent lower at €1.55.

Mr Liam Igoe, analyst with Goodbody Stockbrokers, said the results confirmed that the recovery in the company's fortunes was continuing.

"For the first time in over three years, the company is in a position to make modest acquisitions," he said.

Glanbia is also looking at the options for its pig meat factory in Roosky, Co Roscommon, which was destroyed by fire in May.

Mr Moloney said Glanbia intended to decide by October on how it would redevelop the plant.

"It's a question of scope and scale," he said.

"There is an opportunity there to modernise it and rebuild it in the right way so that the business as a whole is sustainable for the future."