Lakeland Dairies Faces Revenue and Profit Decline Amid Challenging Year
Source: The DairyNews
Lakeland Dairies, a prominent dairy cooperative, has reported a notable drop in turnover and profit for the fiscal year 2023, attributing the decline to a challenging operating environment.
According to the company's latest financial report released on Wednesday, April 17, turnover decreased by €300,000, falling to €1.6 billion compared to €1.9 billion in 2022. Operating profits also witnessed a significant decline, plummeting fr om €32.5 million in 2022 to €14.8 million in 2023, before exceptional expenses.
The annual report highlights once-off exceptional expenses totaling €14.5 million, attributed to redundancies and facility restructuring costs, including the upcoming closure of Lakeland Dairies' site in Banbridge, Co. Down, scheduled for June 2024.
Despite the challenges, Lakeland Dairies processed two billion liters of milk collected from 3,200 farmers across 17 counties in Ireland last year. The cooperative disbursed nearly €800 million in milk payments to its farmers, contributing to a balanced regional economy.
However, the global dairy market collapse significantly impacted Lakeland Dairies' financial performance in 2023. Approximately 15% of the cooperative's trade passes through the Suez Canal and the Red Sea, wh ere repeated attacks on commercial vessels have disrupted operations.
Colin Kelly, Lakeland Dairies' Group CEO, characterized 2023 as a difficult year for the dairy industry, marked by collapsing global markets, high operating costs, elevated interest rates, and inflationary pressures.
Despite these challenges, Kelly emphasized the cooperative's resilience, with a robust balance sheet and strong revenues and operating profits before exceptional expenses. Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) stood at €43.4 million in 2023, compared to €60.2 million in 2022.
In its future outlook, Lakeland Dairies anticipates a period of transformational change, with a renewed focus on maximizing milk prices for its farmers. Despite ongoing challenges, improvements in global dairy markets offer a more optimistic outlook for milk prices in 2024.
The annual report highlights once-off exceptional expenses totaling €14.5 million, attributed to redundancies and facility restructuring costs, including the upcoming closure of Lakeland Dairies' site in Banbridge, Co. Down, scheduled for June 2024.
Despite the challenges, Lakeland Dairies processed two billion liters of milk collected from 3,200 farmers across 17 counties in Ireland last year. The cooperative disbursed nearly €800 million in milk payments to its farmers, contributing to a balanced regional economy.
However, the global dairy market collapse significantly impacted Lakeland Dairies' financial performance in 2023. Approximately 15% of the cooperative's trade passes through the Suez Canal and the Red Sea, wh ere repeated attacks on commercial vessels have disrupted operations.
Colin Kelly, Lakeland Dairies' Group CEO, characterized 2023 as a difficult year for the dairy industry, marked by collapsing global markets, high operating costs, elevated interest rates, and inflationary pressures.
Despite these challenges, Kelly emphasized the cooperative's resilience, with a robust balance sheet and strong revenues and operating profits before exceptional expenses. Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) stood at €43.4 million in 2023, compared to €60.2 million in 2022.
In its future outlook, Lakeland Dairies anticipates a period of transformational change, with a renewed focus on maximizing milk prices for its farmers. Despite ongoing challenges, improvements in global dairy markets offer a more optimistic outlook for milk prices in 2024.
