Lakeland Dairies increased its revenues by 20% to £1.09 billion, according to the company's annual results for 2021 published today (Wednesday, April 13).
The revenue growth was recorded across the processor's four operating divisions of Food Ingredients; Foodservice; Consumer Foods; and Agribusiness.
The 2021 performance resulted in an operating profit of £23.6 million, which was up by 8%.
The report shows EBITDA (earnings before interest, tax, depreciation and amortisation) of £46.4 million, an increase of roughly £4 million.
The cooperative finished the year with almost £193.4 million in shareholder funds.
Lakeland collects two billion litres of milk annually from over 3,200 family farms across 16 counties on the island of Ireland.
The cooperative has eight processing facilities and exports over 240 products to 80 countries.
The 2021 annual report showed that Food Ingredient revenues increased by 20% to £696.6 million. This was due to "consistently strong demand" for powders, proteins and dairy fats.
Over 280,000t of milk powders and butter were produced in 2021, which is a 12% increase in volume shipments.
There was a 23% growth in Foodservice revenues to £187.6 million which the company described as "excellent" given the volatility in global markets due to the Covid-19 pandemic.
Sales of all products improved on 2020 levels including dairy cream; cream blends; flavoured milk; and ice-creams. There was a recovery in Lakeland's global markets, most notably in China; Asia and the Middle-East.
Lakeland noted that inflation emerged as "an unwelcome factor" in 2021 and had an impact on "onward pricing into the market".
Consumer Foods recorded revenue growth of 16% to £142.6 million. This was attributed, in part, to a greater uptake of dairy by consumers in the retail grocery sector in 2021.
The Agribusiness division, known as Lakeland Agri, posted a 14% rise in revenue to £72.5 million. This was due to strong feed sales of 218,000t and a 19% jump in fertiliser sales in 2021 compared to the previous year.
In response to rising input costs, Lakeland Agri issued a feed discount voucher to milk suppliers last December.
The cooperative also stated that its fertiliser and calf milk replacer deferred payment schemes are supporting customers to manage cash flow in "challenging times".
Lakeland Dairies group chief executive, Michael Hanley told Agriland that the "robust" financial performance reflected "prudent management" in an "intensely competitive and increasingly volatile trading environment".
"This enabled Lakeland to pay a competitive milk price, also reflective of overall market conditions, throughout the year," he said.
"We are focused on a sustainable future and the creation of further value for our dairy farmers.
"We expect relatively stable dairy market conditions through 2022, albeit there are significant challenges in our operating environment, including inflationary pressure on all costs, as economic uncertainty in light of the pandemic and geopolitical issues persist," Hanley stated.
He said that all staff members in the foodservice division who had been temporarily laid off due to plant closures caused by the pandemic had since been rehired.
"Certainly what we're seeing in food service and across all our dairy markets is customers back in business, looking for more good quality products from Lakeland Dairies," Hanley noted.
Lakeland Dairies chair, Niall Matthews agreed:
"There's no issue selling more product, the more we produce every year - the demand more than matches it.
"We operate in a complex global environment and marketplace where the pace of our innovation, and our operational and business performance, must constantly adapt to meet a very wide range of trends and imperatives for the short, medium and longer terms," he stated.