Lakeland Dairies’ revenues across its four operating divisions of food ingredients, food service, consumer foods and agribusiness, jumped by €590m to €1.9bn in 2022.

Operating profits rose 15% to €32.5m in a year dominated by highly volatile commodity prices. Lakeland chair Niall Matthews said the co-operative distributed €1.1bn in milk price payments to suppliers which “has a continuously positive multiplier effect ... in their rural communities.”

Group CEO Colin Kelly, who took up his position in January of this year praised his predecessor Michael Hanley, who finished his 16-year term as CEO with a record-profit year.

Looking into those results a little deeper, there are plenty of signs of what a difficult trading year it was as Lakeland tried to navigate the rapidly changing environment.

The group finished the year with stocks of finished goods more than 50% higher than the previous year. During 2022 it had writedowns on stocks which amounted to €15.3m, a ten-fold increase on 2021’s number.

The changing interest-rate environment also starting to take a toll, with interest paid on borrowings passing €4.4m in the year.

Outlook

Looking ahead, the board of the co-operative will review and consider the strategy for the business during the first half of this year, and once that is approved, the focus will shift to the implementation of that strategy.

The review is based on a comprehensive internal and external analysis undertaken in 2022 to understand the group’s direction in a future where further growth in milk supply in Ireland will be limited.