Aurivo revenues and profit drop in 'challenging year'

IN an 'extremely challenging year', Aurivo revenues declined by 16.4% in 2023 to €638.6m. on the prior year’s record turnover of €764.2m.

The decline was primarily related to the sharp deterioration in dairy commodity prices experienced throughout 2023, a reduction in the volume of external milk processed and a 39% reduction in fertiliser volumes sold.

The business endeavoured to support the milk price throughout 2023 for its dairy farmers, and this gave rise to a significant decline of 71.6% in operating profit in 2023 to €5.1m. (FY22: €17.8) and a decline of 43.8% in EBITDA to €14.0m (FY22: €24.9m).

The company announced its full-year financial results for the year ended December 2023 today.

Despite the significant challenges of high inflation, geopolitical tensions and declining commodity prices, Aurivo delivered a robust performance while remaining committed to its strategic priorities, demonstrating its resilience and dedication to building a sustainable future for the business.

Investment of €17.8m. on capital expenditure in 2023 brings the investment programme to €61.4m since 2019.

The Aurivo milk pool stood at 509m litres in 2023, a decline of 1% on the previous year, however, that was a strong performance against a backdrop of Irish milk production that declined by 4.1% nationally.

Commenting on the annual results for 2023 and outlook for 2024, Donal Tierney, chief executive of Aurivo, said: “Notwithstanding the impact of the global challenges on Aurivo’s financial performance for 2023, the co-op remained absolutely committed to its strategic priority of building a sustainable future for the business, and delivered a robust performance for the year.

“The year under review was one of both continued investment in the business and support to our members in very challenging circumstances. While we envisage that 2024 will be a better year for both Aurivo and the sector, we will continue to manage the business prudently, supporting our farmer members and making effective and necessary investment for the future.

“Our focus continues to be on the delivery of ongoing value to our members, customers and the communities we serve and operate in.”

Raymond Barlow, chairman, said: “2023 was a tough year for Aurivo. However, our resilience and dedication to ensuring a strong, sustainable co-op ensured a robust performance. My thanks to our farmers, employees and customers for their ongoing support of Aurivo.”

Aurivo Consumer Foods reported a strong year. Revenues were flat at €137.5m in 2023 (FY22: €137.2m). In the last quarter, Aurivo successfully completed the acquisition of Arrabawn’s liquid milk and butter van sales business.

Due to exceptionally difficult dairy market conditions, the Dairy Ingredients business experienced a very challenging year. While overall performance was impacted as a consequence, the outturn for the year was in line with expectations following the co-op’s decision to support farm gate milk price in so far as it could during the year. Dairy Ingredients revenues were down by 30.6%.

The new €15.5m evaporator at its Ballaghaderreen base was fully commissioned in the second quarter of 2023, lessening dependency on third parties for evaporation capacity while also contributing significantly to emission reduction.

Aurivo Agribusiness experienced a mixed year. Revenues for the business unit declined by 13.9% to €161.7m .

Homeland stores delivered another consecutive year of increased retail footfall and sales growth. Spring and summer were challenging due to a weather delayed start to the fertiliser spreading season. This coupled with a rapid and continued decline in fertiliser commodity prices resulted in a significant impact on the overall performance of the Agribusiness unit.

Aurivo’s marts had a strong year despite a small reduction in the number of livestock sold (0.8% in cattle, 2.2% in sheep). Cattle numbers sold through marts were back across all marts in Connacht during 2023 but Aurivo’s percentage reduction was lower than the market decline percentage. Throughput at year-end stood at over 76,000 cattle and 65,000 sheep; the average price for cattle up marginally on 2022.