BY HARRY WALSH
DONEGAL Creameries PLC reported a trading loss of ¤115,000, down from a profit of ¤11.2m the previous year.
Details of the difficult economic climate were outlined to shareholders at a well attended AGM in the Mount Errigal Hotel yesterday, Thursday.
The loss is being attributed to a fall in the value of assets owned by the company, including property in Donegal and Sligo. Shareholders were also informed that trading profits were also down by ¤3.5m. Earnings per share have been almost halved to 30c.
No job losses are immient, according toMr Ian Ireland, Group Managing Director.
Mr Ireland told the meeting that the prevailing trading conditions were very challenging in both the dairy and agri input business and warned that the market for dairy commodities continues to be difficult.
"Sales in both liquid milk and agri-inputs in local markets in the first few months of the year have been impacted by the significant swing in the Euro Sterling exchange rate and resultant cross border purchasing," he said.
Mr Ireland urged members to 'buy local' and support all Donegal Creamery businesses.
"Milk prices are not good and it's important that we're sympathetic to each other - particularly at this time," he said.
However, he reassured shareholder that job losses were not imminent.
"We are working hard together with staff, who agreed to a pay freeze in January last, to get through this extremely tough period. If we were to suffer a significant drop in any of our businesses we might have to re-visit matters but, as things stand, we will be able to avoid any redundancies," Mr Ireland said.
The Group Managing Director told shareholders that their key strategic businesses were on track to deliver a strong performance in 2009.
"Development of our added value dairy product business is going well and early indications in the growing programme for the Irish Potato Marketing seed business are very favourable," he said.
Profits from operating activity were ¤5.8m last year, down from ¤9.3m in 2007 and include ¤1.1m of revaluation gains on investment property. Underlying profits were ¤4.7m down from ¤6.1m in 2007 manly due to dairy commodity prices and less activity in the property market.
All resolutions were approved yesterday including the payment of a final dividend of 9 cent per ordinary share, payable on August 28.
Underlying earning per share from continuing activities before the impact of revaluations in investment properties and a deferred tax rate change was 46.1 cents (2007: 56.9 cents). Market expectations are that the earning per share will fall to 30 cent in 2009.
The chairman, Geoffrey Vance, said that turnover from continuing operations increased by 3.4 per cent from ¤125.6m to ¤129.9m in 2008.
"It was a satisfaction year in overall business performance in view of the challenging environment, particularly in the last quarter and the difficult trading environment for global dairy products," he said.
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