Connacht Gold owner Aurivo profits rise 28pc as milk prices surge

Positive results come even as the co-op pays a record high price to milk suppliers

Connacht Gold owner Aurivo has seen a massive surge in revenue and profit even as it battles higher costs

Sarah Collins

AURIVO, the owner of Connacht Gold butter, saw a 41.2pc boost in operating profits last year to €17.8m despite “significant” cost inflation.

It was a record year for milk processing, the co-op said in its 2022 annual results on Wednesday, with 29 new suppliers entering the dairying sector in Ireland.

Earnings before interest, tax, depreciation and amortisation (Ebitda) came in at €24.9m, up 28.1pc on the previous year.

Total revenues were up 34pc in 2022, compared to the previous year, reaching €764.2m, the co-op reported in its 2022 annual results.

Revenues in its dairy ingredients business surged by 44.6pc to €340.4m thanks to the growth in milk processing, increased sales to Central America, the Middle East and south-east Asia, and the addition of the 29 new producers. Its consumer foods and agri-business divisions also saw surging revenues of more than 30pc each.

The firm’s record performance comes despite paying record high milk prices to farmers last year of 61.4 cents per litre, up 50.9pc compared 2021.

Farmers’ advocates have been warning of a milk price war after four of the country’s biggest supermarkets said they would cut the price of milk (by €0.10) for the first time in more than a decade.

Tesco announced it will cut the price of its own-brand butter by €0.40.

Aurivo is one of Ireland’s biggest co-operatives, employing around 670 people and exporting to almost 50 countries.

Last year the co-op invested €19.9m in operating assets, almost triple its investments in 2021, to ensure future sustainable growth.

It recently launched a bid to take over Arrabawn’s liquid milk and retail butter van sales business. The proposed merger is subject to a competition probe.

Chief executive Donal Tierney said the business was “facing further volatility and headwinds in 2023” with dairy commodity prices falling sharply.

“The year under review was an exceptionally challenging one, with significant inflationary pressure and volatility causing added uncertainty both on farms and within our co-operative,” Mr Tierney said.

“Whilst inflation is showing signs of moderating, it is likely that input costs for both farmer and processor will continue to be higher than historical averages.

“While there has been a noticeable reduction in farmgate milk price, we expect the milk price to settle above the historical average milk price.”