Lakeland reports uplift in revenues to €1.9bn for 2022
Lakeland Dairies’ revenues increased by 45% to €1.9bn across its four operating divisions.
Lakeland Dairies, the largest cross-border dairy processing co-operative on the island, has announced results for 2022, with increased revenues and operating profit, while paying a very competitive milk price to milk producers throughout the year.
Farmer owned Lakeland Dairies collects over two billion litres of milk from 3,200 farm families across 16 counties in Northern Ireland and the Republic of Ireland.
The co-operative has a portfolio of 240 different dairy products made on 8 highly efficient processing sites which it exports to over 100 countries worldwide.
Lakeland Dairies - Group Revenues: €1.9bn
Lakeland Dairies’ revenues increased by 45% to €1.9bn across its four operating divisions of Food Ingredients, Foodservice, Consumer Foods and Agribusiness, up by €590m on the prior year figure of €1.3bn.
This yielded an operating profit of €32.5m, up by €4.3m (+15%) and EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) of €60.2m, which increased by €4.8m.
During the year, Lakeland Dairies distributed €1.1bn in payments to milk supplying farms across 16 counties, spanning both the north and south of the island.
Lakeland Dairies closed the year with a strong balance sheet including Shareholders’ Funds of €273m.
Food Ingredients Division - Revenues: €1.19bn
Food Ingredient revenues increased by 43% to €1.19bn, based on a very strong performance, where Lakeland processed extra milk volumes while meeting consistently high demand across its dairy food ingredients portfolio. This also resulted from ongoing investment in plant optimisation and efficiencies. The co-operative exported record volumes of milk powders and butter during the year, benefiting also from increased market prices.
Foodservice Division - Revenues: €310.9m
Foodservice revenues increased by 39% to €310.9m, up by €87m on the prior year figure of €223.9m. This was achieved in spite of a difficult period for the global foodservice sector with continuing pandemic lockdowns and the war in Ukraine presenting challenges around cost inflation, supply chain disruption and fears of recession. Despite this, with a resumption of traditional service models and consumer behaviour, confidence returned to the sector enabling a more sustainable platform for business growth and development.
Consumer Foods Division - Revenues: €272.9m
Consumer Foods experienced a 60% uplift in revenue to €272.9m, up by €102.7m on the prior year figure of €170.2m. This includes positive organic growth across Lakeland Dairies’ consumer portfolio of products including new listings and price adjustments which were necessary to address key inflationary pressures.
Agribusiness Division (Lakeland Agri) - Revenues: €125.3m
Lakeland Agri increased revenues by 45% to €125.3m based on a combination of strong operational performance and solid demand. 2022 was challenging given overall market volatility, including supply chain disruption due to the war in Ukraine and unprecedented increases in the cost of energy. While raw material costs increased significantly and this influenced animal feed prices, Lakeland Agri sought to minimise increases for all customers.
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. I warmly acknowledge the excellent contribution of my predecessor, Michael Hanley, and the management team, to the success of Lakeland Dairies, as reflected in our 2022 results.”
He added that 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 noted too that the market conditions for 2023 are “proving much tougher for our suppliers”, 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.”