Earnings (EBITDA) at the Carbery Group increased 33% to €35.3m as a direct result of strong performance in Synergy, the group’s international flavour and natural extracts business. Overall, the ingredients division performed strongly, and partly offset lower earnings in the dairy division.

Dairy performance was back mainly as a result of the co-op paying an industry leading milk price of 32.0c/litre (incl VAT) against a backdrop of challenged global markets. It created a €5m (1c/l) stability fund to support prices in 2016.

Turnover increased 10% to €349.5m driven by increased revenues in the ingredients division and was partly offset by lower revenues in the dairy division. The latter declined as a consequence of evolving weakness in international dairy markets. When the effect of currency is stripped out, turnover increased 4%. The Ballineen facility processed 450m litres in 2015.

Operating profit before exceptional items increased 39% to €25.5m, while operating margins increased to 7.3% in 2015 from 5.8% in 2014. Pre-tax profits decreased 9% to €20.6m due to an exceptional cash gain in 2014. The Irish businesses, comprising of cheese manufacturing and ingredients, delivered solid performance. The Dubliner brand continued to perform, with volumes growing domestically and in the US market.

Whilst favourable to other commodities, market returns for cheese weakened as 2015 progressed. Capacity at Carbery’s Ballineen facility now exceeds 50,000t.

This is an extremely well invested and efficient facility that produces a range of cheddars including premium mature cheddars, which can take up to 18 months to be ready for market. This all adds to the mix to boost the milk price. Synergy had a very strong year in 2015, achieving record growth. It also consolidated operations in the UK onto one site.

During the year, the group disposed of its 50% stake in the Nutrifont joint venture in Brazil, where it recorded a capital gain from the sale of €6m. This was not part of Carbery’s strategy, however its partner BRF sold its dairy assets to Lactalis, which necessitated the sale of the Carbery share also.

Last year, capital expenditure amounted to €20m, bringing the total invested in capital over the last five years to €74.5m. One of the key investments last year was an IT system (ERP) for Synergy. Net debt at year end was back 20% (€6.7m) to €27.8m. Net debt to earnings was a low at 0.8 times down from 1.3 times a year earlier. The annual interest charge was €1.5m.

Carbery expects supply to increase a further 7-8% in 2016.