Lakeland Dairies made a post-tax profit of €18.4 million last year, recovering from a loss of €8.1 million in 2023.
It was buoyed by a resurgent global dairy market and increased added-value revenue following the acquisition of Belgian dairy business De Brandt.
Milk supply to the Cavan-based group remained steady last year despite the first half of 2024 being “brutal for farmers” with weather conditions having a “massive impact” on farm outputs, Lakeland Group chief executive Colin Kelly told The Irish Times.
The farmer-owned group’s latest financial accounts show revenue rebounded to €1.75 billion after a lean year in 2023 which saw revenue drop to €1.6 billion. That still leaves the co-operative slightly behind its 2022 revenue figures of €1.9 billion.
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The growth was driven by significant increases in the co-operative’s food ingredients section where turnover rose from €955 million to just over €1,103 million. Food service revenue was up slightly amid a slight contraction in its consumer foods section.
Mr Kelly said the “strategic, and sometimes tough decisions” the dairy-group made in 2023 were “beginning to bear fruit” as the company returned to profitability in 2024.
Lakeland Dairies closed three processing plants in 2023 with the loss of 78 jobs as part of measures aimed at increasing efficiency in the production side of the business. The move resulted in €14.5 million of exceptional impairment and redundancy costs as the company recorded a loss of €8.1 million in 2023.
In Ireland, the co-op is best known for Champion Milk and Champion Butter but it also supplies milk sticks for as many as 80 per cent of domestic flights to the US, and is a supplier to many blue chip branded products.
In light of the US tariffs set to hit the Irish dairy sector, Mr Kelly said the group does not have “a huge exposure here to the US directly in terms of the product that we sell there, but we will have a huge exposure indirectly.”
He described the tariffs as “the big challenge and the big unknown” raising concern over the impact the trading restrictions will have on the global economy and the knock-on impact to consumer confidence.
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Exports are “largely dependent” on people having disposable income and “consuming premium dairy products”.
“There’s a level of uncertainty in the economy globally, which there is now on the back of the things that have happened over the last week to 10 days, it looks like that can only be negative.”
Mr Kelly stressed the importance of maintaining “cool heads” while staying “agile but not overly reactive” while the market waits for the EU’s response.
“I do expect there will be displacement of dairy products and my big worry is the global economy and consumer confidence.”
The group’s primary export focuses are on Europe and various parts of the developing world, Mr Kelly said, emphasising the impact that the group’s recent acquisition of Belgian-based butterfat business De Brandt Dairy is having on their production of value-added products.
Looking to the future, he said the group will continue its current objectives of a “ruthless focus on operational efficiency”, growing value internationally through acquisitions, and building value through innovation.
With the Irish nitrates derogation due to expire next January, the group emphasised its importance for Irish farmers describing it as “hugely significant for the industry” and hailing the progress found by the Environmental Protection Agency that overall nitrogen levels had fallen.
This story was updated on April 9 to correct the year in the third paragraph to 2024
