Glanbia reported a solid performance for the first half of the year. Despite currency headwinds impacting negatively on revenue and earnings growth, revenues for the first six months increased 8.1% (10.7% constant currency) to €1.8bn.

The group saw earnings (EBITA) increase by 6% (10.3% constant currency) to €129.5m. EBITA margin contracted 10 basis points to 7.2%. Adjusted earnings per share increased 6.8% to 32.45c. An interim dividend of 4.43c was announced.

Performance Nutrition fueled the growth with revenue growth of 17% and profit growth of 28%, driven mainly by increased volumes.

Speaking to the Irish Farmers Journal, Siobhán Talbot, group managing director, said that although performance nutrition had a good first half in 2014, growth will moderate as the group had a good back end in 2013. She added they have seen “some demand elasticity due to price increases as this is a very competitive space”.

Revenues in global ingredients increased 6.2%, with higher pricing the main driver of growth. This partially offset a decline in volumes of 4.8% due to tight supplies because of a very competitive milk environment in Idaho. This resulted in increased milk input costs and reduced throughput in whey and cheese in Idaho.

The US is now experiencing the largest growth in supply since March 2012 as farmers are starting to respond to high milk price and low grain and corn inputs costs, according to Talbot. She added that they have also now achieved greater security of supply, with two-year supply contracts in place.

On the dairy market outlook, she said that there is no doubt we are seeing a response to global supply increases and there is an element of watching to see what happens. This tells us that volatility hasn’t gone away in this thinly traded market, she said. However she remains positive about dairy markets in the longer term.

Dairy Ireland performance was behind last year, with revenues back 7.7% and EBITA down 13.2%. This was a result of lower agribusiness sales relative to the strong first half last year driven by the poor weather of last spring.

Talbot said that while the consumer is exhibiting more confidence, this can have a lag effect in terms of their product sales. She added there are still challenges in branded versus private label, but is confident that dairy Ireland will perform better in the second half due to greater efficiencies coming into play.

The company also announced a €60m investment in its Idaho plant which will include increased production capacity of both whey protein and a specialty milk component used in infant formula and supplements.