Arla, the farmer owned dairy co-op, will pay out all of its net profits from 2018 to its farmer members. The co-op will distribute €290m to its farmers, in the form of a 2.3c payment for every litre of milk supplied to the co-op during 2018.

With 11,200 owners, this will equate to an average once-off payment in the region of €26,000 for each Arla farmer.

Arla said this exceptional payment was in recognition of the difficult weather in 2018, when drought conditions last summer hit farms hard and left many in a difficult financial position.

The co-op is forecasting sales for 2019 to be in the region of €10.2bn to €10.6bn

Arla made the announcement as it reported a 1% increase in full-year sales for 2018 to €10.4bn, which was driven by 3% growth in sales of branded consumer products.

Over 45% of Arla’s business now comes from branded consumer dairy. Profits (EBIT) for the year grew by 6% to €404m.

For 2019, Arla said it plans to invest €458m in capital projects, including a new milk powder facility in Germany, as well as the expansion of several sites in northern Europe. The co-op is forecasting sales for 2019 to be in the region of €10.2bn to €10.6bn.

The co-op recently implemented a cost-cutting programme across the business known as Calcium, which aims to deliver €400m in savings by 2021.

This programme delivered €114m in cost savings during 2018, which was well ahead of the €30m savings target for the year.