Cross border dairy processing co-operative Lakeland Dairies has reported higher profits and revenues for last year on the back of relative stability in global dairy markets.

Lakeland Dairies said its group revenues increased by 5.3% from €769.8m in 2017 to €810.5m in 2018.

This yielded an operating profit of €17.5m, up from €16.8m in 2017. 

"This was driven by strong returns from our three main business divisions where we were also able to capitalise on our significant economies of scale, benefiting from the significant investments of recent years in technology, automation and lean operation across our processing footprint," the company said. 

The co-op's Food Ingredients division saw its revenues for last year grow by 4.6% to €489.9m, which Lakeland said reflected the quality, flexibility and reliability of its offer and general buoyancy in the end markets and food manufacturing sectors of its customers.

Revenues at its Foodservice division rose by 3% to €246.9m in 2018, maintaining the "very robust" platform achieved by a significant growth in sales in the prior year and processing record volumes of value-added products.

Its Agri-Trading division revenues jumped by 19% to €73.7m, driven by organic growth where customers required higher volumes of feed during the year, mainly due to "radically variable weather conditions ranging from blizzards to drought". 

Lakeland said it supplied feed and fertiliser at the most competitive possible prices to ensure value and performance for dairy farmers.

The merger of Lakeland Dairies and LacPatrick Dairies recently received all necessary regulatory approvals.

The new society, which will be called Lakeland Dairies Co-Operative Society Limited, will be the second largest dairy processor on the island of Ireland.

It has a cross-border milk pool of 1.8 billion litres, produced by 3,200 farms across a catchment area including 16 counties. 

The co-op's chief executive Michael Hanley said that market conditions for 2019 will be contingent on factors including the still uncertain impacts of Brexit and the overall balance of global supply and demand across our product portfolio. 

"We will meet any potential headwinds by continuing to ensure complete efficiency and flexibility across all of our operations, while at all times paying the highest possible milk price in line with market conditions," Mr Hanley added.