Profits almost double to €5m at Minch Malt

Minch Malt, the Athy-based company that produces malt for the brewing and distilling industry and is owned by Boortmalt, saw its profits almost double last year to €5m. Accounts recently filed with the companies office (CRO) show operating profits at Minch Malt soared by almost 80% for its financial year to the end of June 2018 to just under €5m. Operating profit margins in the business widened from 6.8% in 2017 to a very strong 11.1% last year.

Contracts

Minch Malt saw sales jump by 9% in the year, to just over €45m, while pre-tax profits in the business surged 77% to just under €5m. The net assets of the business were valued at €40.6m at year end.

Minch Malt is Ireland’s oldest and largest malt producer and supplies companies such as Diageo with malt. The company contracts up to 140,000t of malt barley every year from close to 600 growers in Ireland and is currently in the process of expanding capacity at its Athy facility by up to 30,000t.

Of the 140,000t of malting barley contracted by Minch Malt, roughly 100,000t goes for brewing, with the remainder sold to distilleries. However, demand for distilling malt is on the rise due to the growth in the number of whiskey distilleries sprouting up across Ireland.

Boortmalt, the Belgium-based malt group, paid €116m to Greencore in 2010 to acquire the Minch Malt business. Minch Malt paid a dividend of €2.2m to its parent company Boortmalt last year, which was an increase on the €1.9m dividend paid the year previous. Boortmalt is ultimately owned by Axereal, the French farmer co-op, which produces close to 3mt of grain, animal feed, flour and malt every year.

Staff costs for the 11 employees at Minch Malt throughout 2018 amounted to €1.1m, meaning average wages in the company are above €100,000.

Despite the fall in sales, operating profits at Minch Sales Ltd rose by almost 40% to just over €477,200 for 2018

Minch Sales Ltd, a connected company that sells fertiliser and other inputs to Irish growers, has also recently filed accounts which show the business recorded a 16% drop in sales to €5.1m for its 2018 financial year.

Despite the fall in sales, operating profits at Minch Sales Ltd rose by almost 40% to just over €477,200 for 2018, as profit margins in the business expanded from 5.7% in 2017 to 9.4% last year.

Malting prices

For 2018, Boortmalt paid Irish malting barley growers a top-up of €30/t on the milling wheat price from the MATIF exchange in Paris for uncommitted malting barley delivered at harvest. The company also offered a further bonus of €10/t for distilling grade barley with low protein below 10%. For the 2019 season, Boortmalt has agreed to link its base price to a different French grain index, the Malt barley Fob Creil price.

Last autumn, Irish farmers were offered a forward contract of €230/t on 20% of their grain, which was availed of by most growers. However, due to weaker grain markets the malting barley price offered by Boortmalt has been falling. In March, the IFA and Boortmalt agreed an offer of €195/t for 20% of a growers contracted tonnage.