Australian dairy firm Warrnambool Cheese and Butter Factory said today (18 January) that its half-year profits were likely to come in at around four times the level generated in the company’s previous fiscal year.
WCB said it estimated that net profit after tax for the six months for the end to December at A$35-37m (US$34.9m-36.9m) – up sharply from A$8.9m last year.
Last February, WCB reported its then half-year profit had risen to A$8.9m from A$1.4m a year earlier – a year when its earnings slumped due to falling dairy prices.
The forecast for the current financial year comes from WCB’s internal management accounts and the company plans to formally report its first-half results by the end of February.
However, WCB said “strengthening international dairy commodity prices” and “a favourable shift in the volume mix of the business to reflect an overall higher margin contribution” had boosted its bottom line.
Nevertheless, WCB warned that its full-year results normally fell below those posted after the first six months of the financial year. The co-op said it may be subject to increases in milk prices in the second half, as well as seasonal milk flow that results in the “less effective utilisation of plant”.
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Late last year, fellow Australian dairy firm Bega Cheese bought a 15% stake in WCB, which sought the investment from its rival to strengthen its balance sheet and raise funds for expansion.