Murray Goulburn, the Australian dairy co-operative, has booked a 28% drop in annual profits on the back of pressure on global dairy commodity prices.
The company posted profit after income tax of A$21.2m (US$15m) for the year to the end of June, down 27.6% on the A$29.3m it generated in the 2013/14 financial year.
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Consolidated sales revenue fell 1.5% to A$2.87bn. Murray Goulburn said revenue and profits were hit by “a deterioration in commodity prices” during the year, although it said the full impact had been reduced by a 29% increase in sales from its dairy foods division and by currency fluctuations. Murray Goulburn said revenue from dairy foods hit A$1.3bn.
The co-operative said profits were “marginally higher” than it had set out in its product disclosure statement in May, when it invited shareholders to invest in its new unit trust. However, revenues were 4.1% lower than Murray Goulburn had forecast in the statement.
The company provided a pro-forma net profit of A$73.3m, which it said was up 0.7% on its forecasts in May. Murray Goulburn said the pro-forma result reflects the business as it is now set up – following the implementation of the capital structure, the IPO of the unit trust and the introduction of a profit sharing mechanism – as though it was the group’s structure in the year to the end of June.
International dairy groups are watching for signs of a recovery in commodity prices, with some companies and industry watchers expecting there to have been an upturn already.
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By GlobalDataMurray Goulburn said it was “confident that a global supply response is starting to emerge as a result of the low dairy commodity price environment”.
The co-op said the favourable exchange rate, combined with initiatives it has been undertaking to offset the pressure on commodity prices, means a net profit after tax attributable to shareholders and unitholders of A$86m “can be achieved, provided dairy commodity prices strengthen during the balance of FY16”.
