Irish dairy giant Glanbia saw operating profit slide nearly €6m (£4m) last year, even though earnings grew more than 4% to €1.83bn (£1.24bn).
It blamed difficult marketing conditions and rising energy costs for the results, which saw profit before exceptional items slip to €80.6m (£55m).
The group’s agribusiness and property division, which mills and sells feed, fertiliser and other inputs to its 5700 Irish dairy and pig farmers, was particularly affected.
This part of the business saw operating profit fall 10% to €10.6m (£6.8m) because of poor global grain markets and the effect of CAP reform on farmers’ purchasing power.
In the food division, which processes and sells liquid milk, pigmeat and chilled food, Glanbia saw profits slip in spite of a hefty 10% sales increase.
It also cited cost inflation and imports from Northern Ireland as problems facing its dairy business, although this was offset by strong pig meat sales.
Glanbia Cheese, the group’s UK joint venture with Leprino, saw rising demand for its mozzarella boost performance.
But it was the core food ingredients business that saw the biggest fall in profits of nearly €4m to €42.7m on sales of €1.1bn.
However, group managing director John Moloney predicted Glanbia would hit financial targets in the coming year.