Revenues increased by 18% to €407m which reflected the integration of Donegal creameries and its stores into Connacht Gold operation but, with the consumer foods and liquid milk markets remaining “extremely challenging.” Overall loss after tax of €1.43m last year was recorded. Its strategy of investing in stores and liquid milk (¤15.3 million) in recent years has clearly not delivered for shareholders. Connacht Gold is proposing to change its name to Aurivo Co-op while retaining the Connacht Gold brand for its dairy consumer products.

Connacht Gold’s Chief executive Aaron Forde told the Irish Farmers Journal this week that the co-op was not receiving an adequate return from the market for its liquid milk.

“The trade is not getting an adequate return for liquid milk from the market place currently as we pay a milk price which tries to ensure the sustainability of the supply chain,” he said.

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Despite these trading and financial difficulties Forde remains confident that a return to strong profits will occur this year and is hopeful that the retailers will agree to pay a higher price for liquid milk

“Adding more value to milk in existing and new markets to help minimise fluctuations in commodity prices continues to be a top priority for Connacht Gold.

In this regard, we are making excellent progress in sales of nutritional and beverage solutions, particularly in the fast-growing continent of Africa,”

Connacht Gold sold its 40% stake in Kent Foods Limited for €8.5m last year.

Net debt levels increased from €7.8m to €19.4m and trade debtors increased from €29m to €37m.

This was mainly due to increased costs and financial pressures on farms something Ford said the co-op was “working through with their members”.

The deficit associated with the co-op’s pension scheme increased by 35% to €10m.

By Division

Consumer Foods recorded a 52% increase in sales to €69m reflecting the integration of Donegal’s milk business.

Forde described the Irish market as particularly challenging with consumer confidence low and being further affected by ongoing austerity measures.

Dairy Ingredients reported a 12% increase in sales to €93m and a successful year overall.

The agri-business division saw sales rise by 29% to €113m reflecting increased on-farm purchases of animal feeds last year.

Volumes at marts business remained flat at €89m.

Aaron Forde sees very strong demand and prices for dairy products for the first three quarters of 2013 and remains hopeful that this year will enable the co-op to return to more profitable ways.