Tipperary Co-op posted an increase in throughput, turnover and profits for 2021 in its annual report and accounts for the year ended 3 December 2021, released on Thursday 30 June.
In what the co-op describes as its “best ever financial performance”, sales increased by just under 24% to €303.52m compared with €245.28m the previous year. Operating profit for the year was €4.99m compared with a €3.11m loss the previous year and earnings before interest, tax depreciation and amortisation (EBITDA) were €12.6m compared with €3.34m for 2020.
The new dryer, which came into operation in the middle of the previous year, contributed to a 16% growth in output from that facility, with overall throughput up 11.5% to 411m litres of milk processed. The creation of this additional capacity brings the five-year capital investment to €56.7m and chair Willie Ryan said “for each Tipperary milk supplier that we now have ample capacity for decades ahead. You will not be restricted by your co-op in terms of volume.”
The return to profit in 2021 from the poor 2020 performance was flagged by CEO John Daly in an interview with Jack Kennedy in September last year.
With the surge in building costs, the five-year capital investment programme is starting to look like value, particularly when we consider what the planning delay will cost Glanbia on a major capital project.
This investment by Tipperary has delivered in the 2021 accounts and has also future-proofed access to processing for Tipperary suppliers who are in a position to increase their milk production. Maximising processing capacity has meant sourcing external milk supplies and as processing capacity increases elsewhere, competition for this milk will be greater.
There is also the issue of “spiralling energy and supply-chain related costs” flagged by CEO John Daly in a comment on the 2021 performance. These are an even bigger problem in 2022, not just for Tipperary Co-op but every farmer and every processor in the country.