2020 Chairman’s Report to Members

In early 2020, all our lives were quickly impacted from the threat of this new virus which swept across the globe. Economies slowed and the movement of people ceased overnight during March and it was a worrying time for all of us. However, it was during this period that our staff, milk suppliers, shareholders and loyal customers worked together to help keep each other safe and maintain the smooth running of the business across all divisions.

For the year under review, group turnover increased by 6.4% driven by an increase in output across all divisions - milk volume + 4.3%, mill volume + 9.9%, stores sales + 8.1% and pharmacy sales + 1.4%. This contributed to a 10.7% increase in pre trade bonus operating results of the Society from €4.99 million in 2019 to €5.53 million in 2020.

The portfolio of investments again performed positively in 2020 and I am also pleased to report the sale of the German property. In last year’s financial statements, the property was revalued upwards by €2.47 million on foot of an improvement in the rented space and tenant lease terms plus indicative offers for the property. While the agreed net of costs selling price was €1.03 million less than its book value, over the life of this investment, a sizeable cash profit was made by the Society.

The performance of both Drinlis and Shinagh Estates continues to contribute positively to profit for the financial year.

Carbery reported another strong performance for 2020 with gross profit increasing by 4.7% on 2019. This can be attributed to the combined strength of its Dairy, Nutrition and Taste businesses. Dairy markets started 2020 on a positive note with stable prices but with the onset of Covid-19 extreme volatility hit the market and all commodities were impacted. At this critical stage, the stability fund was utilised to support the price and help milk producers through this unsettled period.

The cheese diversification project was completed during the year and mozzarella cheese rolled off the production line in September. This is another step in Carbery’s journey to broaden their product offering and grow their customer base around the world.

Carbery paid a bonus of 0.50 cents per litre on 2020 milk supplies at year end.

Milk supply increased by 8.8 million litres to over 213.7 million litres. Favourable weather for grass growth in the key peak milk supply months and a stable milk price were crucial to this increase.

Our milk suppliers continue to produce top quality milk suitable for manufacturing value added products for international dairy markets. During the year, further quality improvements were made on farms by reducing thermoduric bacteria levels and changing wash routines to chlorine free detergents.

The Society’s milk suppliers were at the forefront of local and national milk quality awards. John O’Regan, Kielbronogue, Schull was the Drinagh winner of the Carbery Milk Quality awards. Tim O’Mahony, Cooladreen, Leap was the Drinagh winner of the Carbery Sustainability award. William and Dan Joe O’Donovan, Minanes, Drinagh represented the Society in the NDC & Kerrygold Quality Milk awards. Richard Jennings, Keelinga, Leap received an award for having the lowest S.C.C. in the Society.

The board approved a bonus of 0.80 cents per litre on 2020 milk supplies at year end. The average milk price paid by the Society on 2020 milk supplies was 35.70 cents per litre after levies and charges and before VAT.

Sales in the trading division hit record levels in 2020 and a bonus of €15 per tonne on fertilizer purchases has been approved. Despite the restrictions of Covid-19, our pharmacies also performed very well during the year.

Output in the Society’s provender mill increased by 9.9% in the year under review. Quality will always remain a priority in the mill and it is operated under the strict requirements of the Universal Feed Assurance Scheme (UFAS) to maintain this high standard. At year end significant bonuses similar to previous years were approved on mill feed purchases.

At year end Joe O’Sullivan retired as CEO. He was appointed Drinagh CEO in 1990 and the Drinagh Co-op of the early nineties was very different to the Society we are now familiar with. Joe, through his leadership, dedication and shrewd business acumen helped develop Drinagh into the success that it is today. I would like to take this opportunity to sincerely thank him for his 30 years’ service as Chief Executive of the Society and wish him well for the future.

I would also like to wish our new CEO Seamus Daly the very best of luck and good fortune in his new role. Seamus has previously held a number of key positions with Drinagh and we look forward to him leading the Society on the next stage of its journey.

Due to Covid-19 2020 was a watershed year in all our lives. However, through a team effort from all involved the Society has emerged in a better position. I would like to thank our excellent staff, management, loyal customers and resilient farmers for their help and co-operation during the year.

I want to thank the Board for their work and patience and assuming a new way of working in this most challenging of years. None of us had heard of “zoom” before but we adapted quickly and held Board meetings remotely for the first time.

A special word of thanks to Mrs Mary Hayes and Mr Michèal Leahy who are retiring off the Board shortly. Thanks to both for their contributions to the Board during their terms of office. I would like to welcome Mr Fin O’Mahony and Mr Peadar O’Driscoll to the Board and wish them well in their roles.

After an unprecedented year in 2020, the Society’s position in the local community and economy is never more important. We can look forward with confidence to the challenges and opportunities that will present themselves to the Society in the post Covid era.

TJ Sullivan
Chairman

Attachments:
Drinagh Annual Report 2020
Drinagh Annual Report 2019
Drinagh Annual Report 2018
Drinagh Annual Report 2017
Drinagh Annual Report 2016
Drinagh Annual Report 2015
Drinagh Annual Report 2014
Drinagh Annual Report 2013
Shareholder Data Protection Notice