Operating profits at mozzarella cheese producer Glanbia Cheese fell from £25.1m in 2020 to £12.7m in 2021, its latest published accounts show.
The UK-based company, which has processing sites at Llangefni in Wales and Magheralin in NI, employs 379 people and is a joint venture between Glanbia plc and US company Leprino Foods.
A sister company based in the Republic of Ireland, Glanbia Cheese EU, opened a new processing facility in Portlaoise in early 2021.
While it has the same management structure as Glanbia Cheese, with Paul Vernon as CEO, its financial performance is not included in the UK accounts.
Turnover within the UK business was up 11.3% to nearly £318m in 2021, of which £211m is generated from UK sales, with £106m coming from sales within the rest of Europe.
However, higher milk prices meant costs were up 16.5%, while both distribution costs and administrative expenses also rose, leaving operating profit at £12.7m.
While operating profit margins dropped from 8.8% in 2020 to 4% in 2021, the latest figure still compares very favourably to margins in other NI food processing businesses.
The company also retains a strong asset base, with net assets of £58.6m, down only slightly on the 2020 figure of £62.7m, due to depreciation exceeding capital expenditure during the last financial year.
In recent years, Glanbia Cheese has recorded operating profits as high as £31m, so it is a valuable revenue stream for its parent companies. In 2021, it paid out dividends of £17m to shareholders.
Looking ahead, the strategic report accompanying the accounts notes the competitive market place this year, with directors expecting overall margins “to be challenging in 2022.”