Lakeland Dairies reveals uplift in revenues to £1.7 billion

At the group's annual general meeting are Lakeland Dairies' Keith Agnew (vice-chairman) Colin Kelly (group chief executive), Peter Sheridan (group chief financial officer) and Niall Matthews (chairman)
Gary McDonald Business Editor

IRELAND'S largest cross-border dairy processing co-operative Lakeland Dairies has announced increased revenues and operating profit for 2022 - achieved "while paying a very competitive milk price to milk producers".

Farmer-owned Lakeland - which collects more than two billion litres of milk from 3,200 farm families across 16 counties in Northern Ireland and the Republic - increased revenues by 45 per cent to £1.7 billion.

The co-operative has a portfolio of 240 different dairy products made on eight highly efficient processing sites, including Artigarvan in Co Tyrone, which it exports to over 100 countries worldwide.

Its increased group revenues across its four operating divisions (food ingredients, foodservice, consumer foods and agribusiness) yielded an operating profit of £28.7m, up by 15 per cent, and EBITDA (earnings before interest, tax, depreciation and amortisation) of £53.2m

During the year, Lakeland distributed £973m in payments to milk supplying farms.

It closed the year with a strong balance sheet including shareholders’ funds of £241m.

Sales at its biggest division (food ingredients) rose by 43 per cent to £1 billion, and Lakeland had foodservice division revenues of £275m (up by 39 per cent).

The consumer foods division and agribusiness division (Lakeland Agri) had revenues of £241m and £111m respectively.

Lakeland Dairies Group chief executive Colin Kelly said: “These positive results are based on a strong, progressive and resilient performance, underpinned by the overall quality of our milk producers, people and operations, notwithstanding a deeply competitive and uncertain global market environment.

“Our 3,200 farm families produced over 2 billion litres of top-quality milk, which was directed towards value-added product categories and market segments, generating optimal returns.

“The impact of geopolitical problems and continuing economic uncertainty were seen globally with serious inflationary effects across every cost base, at farm and organisational level. Nevertheless, the dairy markets yielded strong returns and Lakeland Dairies was able to pay a very competitive milk price to our milk producers.”

He added: “Market conditions for 2023 are proving much tougher for our suppliers and will remain contingent on global factors including the overall balance of supply and demand, across our extensive product portfolio, while economic uncertainty remains a serious concern, with the potential for continued market volatility.

“In the years ahead, we will seek to optimise the strengths that Lakeland Dairies has established to date while also continuing developments on an ever more sustainable platform. Global demand for dairy will remain strong in the years ahead.

“With a focus on innovation and efficiency, Lakeland Dairies is in a competitive position to take advantage of future market buoyancy and we are committed to paying as high a milk price as possible. Our ultimate objective is to ensure long-term market success for our milk producers, and for our valued customers, all of whom remain at the forefront of everything we do.”