The trailing impact of last year’s global dairy glut has worked its way into the latest results from Murray Goulburn, Australia’s largest dairy processor.
The business just posted a loss of $31.9 million for the half year to December, with revenue down 14.8% to $1.176 billion.
Ari Mervis, appointed CEO in December after a management shakeup, says the first half of this financial year has been challenging.
The previous CEO Gary Helou announced his departure in April last year at the same time as a profit downgrade and cuts to the price paid to farmers for their milk.
Mervis says record rain and intense competitor activity reduced milk intake by 20.6% to 1.6 billion litres over the six months, impacting revenue and the group’s ability to fully recover fixed costs and overheads.
“In addition, although the recent increases in the global prices of dairy commodities are welcome, they have not recovered in time to impact on MG’s first half sales volume,” he says.
Revenue from Murray Goulburn’s dairy foods segment fell 19.7% to $558 million.
Mervis says he’s pleased with progress on cost cutting and working capital initiatives.
Normalised net profit after tax was down 6% to $9.4 million, excluding one-off items of $41.3 million.
The board declared a fully franked interim dividend/distribution of 1.7 cents a share/unit.
The half year results by the numbers: