Guernsey Dairy finished 2017 with a £354,669 deficit, the States accounts for that year have shown, but the Chairman of the entity said the loss was "partly due to one off costs".
The loss is only around half of the deficit it ran into in 2016, which was £791,161 in the red, but in 2016, it made a single payment of £737,480 to milkmen as compensation for their milk rounds, meaning in real terms, the Dairy's losses increased dramatically.
But 2017's loss can be put down to the use of money to get the Dairy site up to a four star OEHPR Hygeine Rating and also bringing the production facilities up to date, following a slew of issues identified.
Though without the payout in 2016, the Dairy's loses for that year would have only been in the tens of thousands for that year.
"Although partly due to one-off costs, the Dairy recorded an operating deficit in 2017, significant progress wasmade in the year with the Dairy’s capital expenditure programme to address the issue of ageing buildings andequipment," the Chairman's report in the accounts said.
"This included considerable reactive maintenance work resulting in a particularly high repairs and maintenance spend. A key aspect of the work undertaken on the fabric of the buildings was to ensure a minimum 4 Star OEHPR Hygiene Rating was maintained, something I am pleased was achieved.
"A prioritised capital plan is in place to replace ageing equipment and additional funding will need to be sourced to fully implement this plan."
The Dairy's reserves have decreased by £355k from £5.0m to £4.7m, because of the deficit in the year.
Below: an excerpt from the General Manager of the Dairy's Report:
In total, revenues were also up for the Dairy, at £275,000 (3.7%) higher than in 2016. Liquid milk revenues were +3.4% ahead of the previous year. The gate price for liquid milk increased by 7.6p (7%) in April 2017. Milk sales in litres were down 1.2% against 2016.
A decision to prioritise the production of butter over cheese with excess milk led to a 44.0% reduction in cheese revenues (£90,078 2017) and a 9.2% increase in butter revenues (£1,067m. 2017). This also led to an increase in butter exports with a 26.4% increase in UK revenues.
There was at one point a butter shortage on island last year, which was put down in part to these exports and also increasing demand in the market for both butter and cream.
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