A bounce in powder sales, improved agribusiness sales and a strong mart turnover helped reinforce western-based Aurivo’s financial results for 2020.
Turnover in dairy ingredients (powder mainly) jumped from €172m to €198m in 2020.
This underpinned a better overall financial position for Aurivo for 2020.
Agribusiness sales jumped from €115m to €128m and, despite COVID-19 restrictions, the marts business just dropped marginally from €67.5m turnover to €65.9m in 2020.
Insulated from COVID-19 restrictions the consumer foods turnover remained steady, moving from €95m to €97m turnover in 2020. The other big positive for Aurivo is that net debt moved from €18.8m to €2.2m (0.15 times’ earnings – down from 2.2).
Importantly group earnings (EBITDA)were €15.1m in 2020, an increase of 69.7% on €8.9m in 2019. Aurivo milk pool for 2020 was 477m litres – a growth of 5.5% on 2019. A large proportion of this is liquid milk (110m litres or 23%).
Aurivo’s liquid milk plant in Killygordon, Co Donegal, processed 110m litres in 2020, an increase of 1m litres on 2019. As a “food-to-go” business, My Goodness Limited (trading as For Goodness Shakes), Aurivo’s sports nutrition business, was most affected by COVID-19.
Aurivo says sales of this product fell due to the implementation of remote working and the notable reduction in footfall across London. In 2015, Aurivo paid €40m for this product that is sold through retailers as a ready-to-drink sports nutrition product.
The new dryer produced 25,000t of various grades of enriched milk powder. This improved the ability of Aurivo to process 35% extra milk per week in Ballaghaderreen.
Aurivo’s agribusiness sales continued to grow in 2020, with a strong performance recorded across all categories in terms of both volume and revenue. Agribusiness delivered a sales turnover of €127.9m, an 11.2% increase on the previous year (2019: €115m).
Despite mart closures nationally from April 2020, Aurivo is reporting a turnover of €65.9m (2019: €67.5m) as the business moved online.
Chief executive Donal Tierney said the bounce back in the balance sheet from under €60m to €67m was driven by retained profits for 2021.
On the marts business, he also said: “Aurivo Marts performed very well given the challenges presented by COVID-19. Marts were closed for a period in April/May 2020 and then went online only for a long period. Overall cattle numbers were down 9% with the average price up 6.5%.
On any potential cap on peak milk supply, Tierney said: “Aurivo is contracted to take milk supply from a number of other co-ops in 2021. This, coupled with the growth from its own milk supply base (which is running higher than envisaged), will mean that the co-op will be close to capacity over peak, but it does not envisage a cap on members’ supply.”
Note: Aurivo will announce full-year financial results later this week for 2020. The annual report won’t be available for another few weeks so we will do a deeper analysis piece when published and available.