Ornua delivers turnover of €3.4 billion, up 36.7%, in ‘uniquely challenging year’
Annualised milk price grew 40% year-on-year, yet input costs also rose rapidly
Print5 May 2023
Ornua, Ireland’s largest exporter of Irish dairy products, has published its operating and financial results for the 12 months ending 31 December 2022, with group turnover reaching a record €3.4 billion.
Group turnover was up 36.7% to a record €3.4 billion. Group EBITDA and operating profit, pre the ‘Ornua Value Payment’, were €157.0 million and €127.2 million respectively, as Ornua “sought to balance high product prices, which were paid to its member co-operatives, while also maintaining and growing market share”.
As a co-operative whose purpose is to create value for its members and the 14,000 Irish farming families they represent, Ornua prioritised strong returns throughout the year, reflected in an Ornua Value Payment of €72.5 million which is made up of monthly and year-end cash bonuses and the premium paid on purchases from members. This is in addition to the strong product prices paid for over 387,000MT of premium Irish dairy product purchased in the year, valued at €2.3 billion.
Dairy markets
The year proved to be an extraordinary one for Irish dairy farmers, Ornua states, with the annualised milk price growing 40% year-on-year. However, input costs also rose rapidly, including fuel, feed, and fertiliser, impacting at farm level. Global milk supply fell by -0.4% in 2022. While remaining resilient, global demand fell by about -1.0% compared to a strong 2021.
Looking at the year ahead, it is expected that Irish dairy supply will be modestly ahead of 2022. Milk supplies are currently ahead of demand, but markets are likely to stabilise in the coming months. Volatility looks set to continue in the areas of energy and input prices however, and an uncertain global economic forecast, and its potential impact on consumer spending, will also present challenges.
Sustainability
In 2021, the group set a target of achieving a 25% reduction in Scope 1 & 2 emissions by 2025. Last year, in line with this target, Ornua achieved a 4% reduction in Scope 1 and 2 emissions, with a further 6% reduction expected this year, following the implementation of renewable energy at sites across the group network.
In line with a new five-year strategic growth plan, Ornua has committed to the adoption of science-based targets through the SBTi (Science Based Targets initiative), an important step in ensuring the business’s sustainability goals and climate actions are not solely aligned to regulatory requirements but are reflective of the highest industry standards.
Ornua adds that it has also continued to invest in key initiatives that; maintain its high responsible sourcing standards; protect Ireland’s grass-based farming system and the welfare of animals; and promote sustainable practices at producer level.
Looking ahead
Persistent challenges around rising input costs, inflationary pressures, and supply chain issues, as well as macroeconomic factors such as geopolitical uncertainty and climate change continue to cause market disruption, Ornua states. By leveraging the experience, agility, and resilience exhibited in response to the challenges of recent years, the company is confident it is well-positioned to continue to meet the needs of its customers, colleagues, and communities worldwide.
In late 2022, the Ornua Board of Directors approved a new five-year strategic plan for the business, Path to Prosper, which will now guide Ornua to 2027. It aims to stimulate continued sustainable growth for Ornua.
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