Aurivo reports 25% increase in operating profits despite turnover being down

AURIVO has reported a total group operating profit of €3.56m in 2016 (before exceptional items), an increase of 25% on the outturn for 2015.

This was delivered on a total turnover of €391m, a decrease of some 7% on turnover for 2015, primarily due to the disposal in 2016 of its shareholding in ECC and a more challenging year for its marts and agri businesses.

 

Financial summary:

Group annual revenues €391m (2015: €420m)

Group operating profit (before exceptionals) €3.56m (2015: 2.84m)

Consumer foods revenues €88.4m (2015: €80.4m)

Dairy ingredients revenues €102.1m (2015: €99.5m)

Agri business revenues €97.2m (2015: €101.4m)

Marts revenues at €78.5m (2015: €86.5m)

Other activities at €24.8m (2015: €52.1m)

 

Commenting on the results, chief executive Aaron Forde said: “In what was a challenging and volatile year, we are pleased to announce a robust performance by Aurivo across all facets of its business in 2016.

“The year was a difficult one for the dairy farmer and farming in general as the collapse in milk price continued well into the year before stabilising in July. With this and general all round economic uncertainty as a backdrop, our focus was twofold - to support our suppliers, while at the same time focusing on delivering efficiencies across the business to safeguard its continued financial and operational success.

“The current year is a better and more sustainable one for the agri sector. With our excellent and innovative team of people, operating efficiently through a philosophy of sustainability, we will continue to enhance our business development and execute our growth strategy.”

Pat Duffy, chairman of Aurivo, added: “Aurivo had a good performance in 2016 and is positioned well for the current fiscal. Regardless of market, political and economic challenges, centring on our core business areas, aligned with supporting suppliers and being customer-focused, we will continue to implement the efficiencies and plans to effectively deliver for all of Aurivo’s shareholders.”

Aurivo’s consumer foods business performed exceptionally well in 2016 with overall sales across milk, butter and sports nutrition increasing by €8m to €88.4m (2015: €80.4m).

It was promising to see liquid milk volumes increase by 21% in 2016. This was mainly driven by Aurivo being successful in obtaining a contract with Tesco Ireland.

The Connacht Gold butter brand grew by 3% over the period.

Agribusiness reported a decline in turnover to €97.2m (2015: €101.4m). This was due to several factors, namely reduced commodity pricing on fertiliser, reduced disposable income at farm level and poor weather conditions. Notwithstanding this, the business performed well in the period.

Feed sales grew in the period, for the third year in a row.

Throughout Aurivo’s retail business, there was a continued focus on delivering outstanding customer service. This was further demonstrated through 12 Homeland stores being awarded Customer Service Excellence Ireland’s ‘Excellence Award’, and the Westport Homeland Plus store being recognised as one of the top 15 retail stores in Ireland.

Notwithstanding a decline in turnover to €78.5m (2015: €86.5m) due to poor cattle prices and weather conditions, the company's livestock marts business performed well in 2016 with a worthy performance in what was a difficult year. Aurivo’s investment in its mart operations continued in 2016, and the improved handling facilities in Ballinrobe and Ballymote assisted in a 21% increase in sheep sales.