Australian dairy group Murray Goulburn today (27 August) reported its highest-ever annual sales – but saw its profits fall.

The company booked revenues of A$2.92bn (US$2.73bn) for the year to the end of June, up 22% on a year earlier. Exports jumped 30%, now accounting for over half of Murray Goulburn’s sales.

However, the group’s net profit after tax slipped 5% to A$27.9m.

Murray Goulburn’s cost of sales increased, while it recorded higher distribution, selling and marketing expenses.

Nevertheless, MD Gary Helou was upbeat about the company’s performance. “International dairy food prices were at very high levels during the 2013/14 year, underpinned by the strong demand from Asia and the Middle East. Our focus on the value growth segments of nutritional powders and international consumer and foodservice dairy food exports, combined with the robust growth in MG’s milk supply helped MG deliver an exceptionally strong year.”

Helou said dairy prices had “declined significantly from last year’s historic highs” amid an increase in supply, high inventories in China and Russia’s ban on EU, US and Australian dairy imports.

The Murray Goulburn chief said demand means the company expects “some recovery” in prices. However, the co-operative has lowered its forecast for its Southern Milk Region price to A$6.00 per kilogram of milk solids, down from a range of A$6.15-6.30.

Meanwhile, next month, Murray Goulburn plans to have further talks with its suppliers over plans to change the co-op’s capital structure.

The company wants to invest A$500m in its business over the next five years to try to tap into growing demand in Asia.

Murray Goulburn wants to raise the funds through issuing units in a unit trust to be listed on the Australian Stock Exchange.

In an update issued yesterday, Murray Goulburn said the next round of consultation with suppliers would take place in September, with more talks planned for November. It plans to hold an EGM in January or February to consider the proposal.

Murray Goulburn has insisted the unit trust will not hold voting shares in the co-op, meaning control will rest with suppliers. It claims the investment leading from the changes in the capital structure will ultimately lead to an increase in the farmgate milk price farmers get for their milk.