Express Dairies headline profits fell sharply for the six months to Sept 30, but the figure was distorted by last summers Glanbia acquisition.
Pre-tax profits slumped to £1.6m, down from £26.6m last year. Much of this was due to an exceptional charge of £21.9m arising from the integration of Glanbias UK liquid milk business, bought by Express for £100m at the end of June, and the subsequent closure of three dairies.
But the acquisition helped lift turnover 17% to almost £449m, and the underlying pre-tax profit was £25m.
The delayed closure of a bottling plant and increased pension costs were partly to blame for the slight decline. However, the imbalance between raw milk prices and weak returns from bulk commodity markets, also played a part, depressing returns in the Ingredients division.
"This principally reflected the strength of sterling, though it was exacerbated by reduced European demand following the Belgian dioxin scare," said chief executive Neil Davidson. "Equilibrium has been restored through the adjustment of UK raw milk prices from Oct 1, though milk supplies to date are running below our expectations."