Cows do their bit to help with Norco's $3.1m net profit.
Cows do their bit to help with Norco's $3.1m net profit. Kelly Mcilvenny

Norco milking results and being awarded the cream

THERE are 3.1 million reasons to drink milk and Norco Co-operative Limited are certainly 'dairy' excited.  

In celebrating 120 years of continuous operations from 1895 to the present, Norco has announced its results for the 2014/15 financial year, reporting a net profit of $3.1 million and an EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) of $10.643 million.  

In addition, a record turnover of $510 million was achieved for the 2014/15 financial year.    

"Our EBITDA for 2014/2015 is a pleasing 38.4 percent improvement on the previous year," Norco Chairman Mr Greg McNamara said.  

Debt is down

"The Co-operative's core debt level has decreased to $33.8 million from $34.3 million in the previous year despite a 20 percent growth in sales.  

Mr McNamara said this result meant Norco was able to pay members and milk suppliers an increase of 3.23 cents per litre.  

With an intake increase from members to 211 million litres, a record $1.1 million was returned in patronage reward payments.  

Contract well-managed

"As reported last year, Coles awarded Norco a 65 million litre milk contract for south east Queensland and northern New South Wales which commenced 1 July 2014," Mr McNamara said.  

"I am pleased to advise that this contract has been managed very well resulting in a successful and rewarding first 12 months of operation.  

"We also thank both our existing member base and the new member farms that have been acquired, who together have supplied the additional milk needed to satisfy Norco's ever growing customer base.  

Mr McNamara said Norco's Route business continues to expand both on a geographical basis and through the range of milk products being offered.  

"(This is) in an effort to cater for the desire of consumers to have a diversified range of milk products to choose from."  

China exports

Mr McNamarai said fresh milk exports to China have been steady but an unexpected benefit of this export program has been the wide exposure Norco has received.  

"The Directors are treating export as a longer term project which we believe will not only provide an alternative value stream for our members' fresh milk but we are also excited by the export opportunities that are unfolding for our ice cream business." he said.  

Contributing factors

Norco Chief Executive Officer, Mr Brett Kelly said there were many aspects contributing to the good results.  

"Our diversified business model, geographical positioning, quality of product and strong long term relationships have been significant drivers in achieving these financial results.  

"The Co-operative structure and values that we collectively uphold are, without a doubt, proving that our members / milk suppliers can rely on the Co-operative to manage their supply in the market place"  

AGM details

At the Annual General Meeting to be held on Wednesday, November 11 2015, members will be asked to approve a 6.0 percent dividend on paid up capital held as at 30 June 2015 based on the profit result for 2014/15.