Ornua notches a €40m operating profit in 2018

05-Apr-2019 - Last updated on 05-Apr-2019 at 08:45 GMT

The Kerrygold Butter is now the number two butter brand in the US, with 2.6m packets sold every week. Pic: Ornua

Ornua, producer of the Kerrygold brand, released its full-year 2018 results that showcased a strong performance in its key European and US markets. It also broke ground on a cheese facility in Spain and prepared for potential fallout from the Brexit deal.

As Ireland’s largest exporter of dairy products, Ornua sells its butter, cheese, yogurt and milk powders in 110 countries under the Kerrygold, Pilgrims Choice, Beo Milk and Forto brands. Ornua shared that it’s operating in a “period of significant and sustained investment across its facilities and brand portfolio.”

Despite this, the company still delivered strong 2018 results for both products and ingredients. Its total turnover nearly hit €2.1bn/$2.4bn (up 0.6% from 2017), group EBITDA was €60.5m/$67.8m (up 12.5%) and operating profit was €40.4m/$45.3m (up 14.8%).

Kerrygold saw 25% volume growth in the US, and the Kerrygold Butter is now the number two butter brand in the US, with 2.6m packets sold every week. It’s also the fastest-selling product of all food and drink brands in the German retail market.

Ornua shared that it sold the equivalent of 3.4bn liters of milk in 2018. It also paid a year-end bonus to members of €19m ($21m), up 27% from last year, and purchased a record 342,000 metric tons of Irish product.

John Jordan, CEO of Ornua, said, “We are pleased to report a strong trading performance for 2018, driving a further uplift on the record growth of 2017. This strong performance was achieved against a challenging global environment characterized by highly volatile butter prices, drought conditions in Europe, economic uncertainty due to Brexit and global trade wars.”

In planning for Brexit, Ornua carried additional cheese stock over the year-end, bringing its net debt to €110.1m ($123.5m). It said this type of investment and support to the industry is an important part of its Brexit strategy.

“For over two years Ornua has been preparing for the potential impact of Brexit. Planning for an event where the outcomes are still unclear has been a significant challenge. The primary focus has been working closely with key UK customers and suppliers to ensure security of supply and to minimize the short-term impacts on our collective businesses,” Ornua said.

Ornua also started construction on a 110,000 sq. ft cheese facility in Spain last year. It’s expected to expand the company’s growth opportunities across continental Europe.

“Our key focus for 2019 is to drive growth for our full brand portfolio and food ingredients businesses across our 110 markets and to continue to deliver value for the 14,000 dairy farmers we represent,” Jordan said.