Arrabawn, a milk processing company based in Tipperary, seemed to defy the worldwide dip in the dairy market last year, reporting its highest financial results ever. Despite international dairy prices witnessing a significant downslide, the co-op registered a record Ebitda and operating profits of €19.1 million and €10.8 million respectively. The enterprise’s operating profit saw a rise of 12.5 per cent from the previous year.
However, the plummeting dairy prices led to a 20 per cent reduction in turnover, taking it down to €403 million. The surplus of supply and diminishing consumer demand, which predicted weaker market returns, adversely influenced the profits of numerous significant suppliers.
On Wednesday, it was reported that both Lakeland and Aurivo experienced a decline in earnings and operating profit, following Dairygold’s news from last week. After 2022, which stood as an outstanding year for dairy markets, 2023 was a tougher year due to the fall in dairy commodities, especially, in the words of chief executive Conor Ryan.
The dip in turnover was balanced by the yield from our highest investment programme ever, as indicated by the record Ebitda and operating profit — both excluding exceptionals,” said he, calling it a heartening outcome.
Arrabawn reported that it made a one-time profit of €4.3 million from selling its liquid business in Kilconnell the previous year, an exceptional item not included in either Ebitda or operating profit. The group also revealed that it had finalised a €3 million expansion of its Dan O’Connor Feeds mill in Limerick in 2023.
The company’s balance sheet showed positive growth, with shareholders’ funds going up by €11.5 million, a surge of 51 per cent from five years back. Moreover, the net debt, caused by the investment programme, had reduced from a peak of €45 million in 2019 to €10.3 million the previous year, marking a fall of €13.8 million from 2022, reaching levels recorded pre-expansion.