Lakeland Dairies has reported that its operating profits fell by more than half (54.5%) in what it called a ‘challenging year for the entire industry’.
In its financial results, published today, the co-op reported that operating profits fell from €32.5 million in 2022 to €14.8 million in 2023.
Following record profits and unprecedented dairy market returns in 2022, the cooperative saw group revenues reduce to €1.6 billion in 2023, from €1.9 billion.
This fall was in line with the collapse in global dairy markets.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for 2023 were €42.4 million, reduced from €60.2 million the previous year.
‘A Difficult Year For The Dairy Industry’
Commenting on the results, the chairperson of Lakeland Dairies, Niall Matthews, said, “In what was one of the most challenging years for the dairy industry, farmers and processors both demonstrated tremendous resilience in the face of enormous pressures.
“Thankfully, the global markets in 2024 have been more positive, which is critical, given the very challenging weather conditions we have endured since the end of 2023.”
Matthews noted the importance of farm families to the business, highlighting €800 million paid in milk prices last year, directly supporting farm families.
He said, “We are making very definite steps to move up the value-add chain to support the long-term operations of our farm families.”
Chief executive officer Colin Kelly added that it was a challenging year for all, saying, “Twenty twenty-three [2023] was a difficult year for the dairy industry.
“Nobody, from farmer to processor, was disappointed to see the back of a year that challenged us at all levels.
“Global markets collapsed, costs at farm and processor level remained stubbornly high, interest rates reached levels not seen for decades, and inflation impacted every one of us, both inside our homes, as well as inside the business.
“However, despite all these challenges, the financial strength of the co-op and our robust balance sheet ensure that we were well placed to navigate this volatility.”
‘Short, Medium And Long Term’
Kelly continued looking towards the future of the business.
He said, “Notwithstanding these global trade issues, 2023 was truly a defining year for the co-op in our 130-year history, as we commenced our new strategy, titled Foundations for a Better Future.
“This strategy is focused on our business being fit for growth and embracing value-add opportunities that will benefit the co-op, our farmers and our people sustainably for the future.”
He concluded, “We are making strategic decisions that will benefit the co-op in the short, medium and long term.”
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