Acquisitions and cost-cutting have combined to boost dairy co-operative Agropur’s year-end bottom line — and to raise its total patronage dividends for the year by 50 per cent.
The Quebec co-operative, which in 2016 landed on Rabobank’s list of the world’s 20 largest dairy companies for the first time, booked net earnings before patronage and income taxes of $153.99 million, on sales of $5.95 billion, for the year ending Oct. 29, up from $87.82 million on $5.87 billion in fiscal 2015.
Patronage dividends to Agropur’s 3,271 members for 2016 totalled $60.11 million, up from $40.59 million in fiscal 2015.
“Agropur’s performance is the result of the sum of all the initiatives we have taken in recent years: our mergers and acquisitions, our cost-cutting programs, our major investments in our brands and in our facilities in both Canada and the U.S.,” president Serge Riendeau, wrapping up his 15th and final year in the post, said in a release Thursday.
“We are prouder than ever of our business model, which helps spread the wealth and develop local communities.”
CEO Robert Coallier, in the co-op’s annual report, said it was able to boost earnings from operations (before interest, taxes, depreciation, amortization and non-recurring costs) by 34.6 per cent, to $411.68 million, “despite still-unsteady global prices for whey products and a fiercely competitive Canadian market environment.”
The Longueuil-based co-op in 2016 also mapped out a cost reduction program expected to produce $100 million in savings over three years, yielding $41 million in savings in fiscal 2016.
The co-op said its focus in 2016 was on “integrating the numerous acquisitions of recent years” but still included “substantial” investments worth $150 million in its Canadian and U.S. plants.
Agropur’s Natrel brand “topped the rankings” in fine-filtered, lactose-free and organic dairy categories, the co-op said.
The Olympic and Iogo brands, a joint venture between Agropur and Ultima Foods, “posted the strongest growth in the fresh dairy products category” in Canada with sales increases of 10 per cent and six per cent respectively, above the industry-average three per cent.
The co-op in 2016 also rolled out Inno Agropur, a diayr product innovation initiative, including the Inno Challenge, in which over 60 participants submitted project proposals and three concepts have been selected for co-development “in the coming weeks.”
Agropur in 2016 also pledged all the products it makes in Canada and sells under its own brands will contain 100 per cent Canadian milk and dairy ingredients and bear the Dairy Farmers of Canada “Quality Milk” certification logo.
Agropur products displaying the logo are expected to appear on grocery shelves also “in the coming weeks.” — AGCanada.com NetworkTagged Agropur, Iogo, Natrel, net earnings, Olympic, patronage dividends