Lakeland Dairies, the largest cross-border dairy processing co-operative on the island of Ireland, has announced strong financial results for 2022, with increased revenues and operating profit, while paying what it said was a very competitive milk price to milk producers throughout the year.

Farmer owned Lakeland Dairies collects over 2bn litres of milk from 3,200 farm families across 16 counties in Northern Ireland and the Republic of Ireland. The co-operative has a portfolio of 240 different dairy products made on eight processing sites which it exports to over 100 countries worldwide.

Lakeland Dairies’ revenues increased by 45 per cent to £1.7bn across its four operating divisions of Food Ingredients, Foodservice, Consumer Foods and Agribusiness. This yielded an operating profit of £28.7m, up by 15 per cent, and EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) of £53.2m

Food Ingredient revenues increased by 43 per cent to £1 billion, based on a very strong performance, where Lakeland processed extra milk volumes while meeting consistently high demand across its dairy food ingredients portfolio. This also resulted from ongoing investment in plant optimisation and efficiencies. The co-operative exported record volumes of milk powders and butter during the year, benefiting also from increased market prices.

Foodservice revenues increased by 39 per cent to £275m. This was achieved in spite of a difficult period for the global foodservice sector with continuing pandemic lockdowns and the war in Ukraine presenting challenges around cost inflation, supply chain disruption and fears of recession.

Consumer Foods experienced a 60 per cent uplift in revenue to £241m.

Lakeland Agri increased revenues by 45 per cent to £111m based on a combination of strong operational performance and solid demand. 2022 was challenging given overall market volatility, including supply chain disruption due to the war in Ukraine and unprecedented increases in the cost of energy.

Lakeland Dairies Group Chief Executive, Colin Kelly said: “These positive results are based on a strong, progressive and resilient performance, underpinned by the overall quality of our milk producers, people and operations, notwithstanding a deeply competitive and uncertain global market environment. I warmly acknowledge the excellent contribution of my predecessor, Michael Hanley, and the management team, to the success of Lakeland Dairies, as reflected in our 2022 results.”

“Lakeland Dairies’ 3,200 farm families produced over two billion litres of top-quality milk, which was directed towards value-added product categories and market segments, generating optimal returns.

“The impact of geopolitical problems and continuing economic uncertainty were seen globally with serious inflationary effects across every cost base, at farm and organisational level. Nevertheless, the dairy markets yielded strong returns and Lakeland Dairies was able to pay a very competitive milk price to our milk producers.

“Market conditions for 2023 are proving much tougher for our suppliers and will remain contingent on global factors including the overall balance of supply and demand, across our extensive product portfolio, while economic uncertainty remains a serious concern, with the potential for continued market volatility,” he said.