Warrnambool Cheese and Butter Factory posted a 93% drop in first-half net operating profit after tax today (12 February).
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The Australian dairy company announced a A$16.7m (US$10.8m) underlying profit for the six months to the end of December, while its final net profit after tax plummeted to A$1.4m, down from A$20.1m for the same period in 2007.
In an announcement to the Australian Stock Exchange, Warrnambool Cheese and Butter said its “first-half performance had been impacted by difficult trading conditions due to the global financial crisis” as “prices for all major dairy products have declined”.
Warrnambool chief executive and managing director Neil Kearney said the “sudden and unprecedented decline in dairy prices from July 2008 has necessitated a significant write-down of inventory values”.
Warrnambool’s net debt increased during the half by A$24.2m to A$77.2m, primarily due to a A$47.6m seasonal build up in inventory, the company said.
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By GlobalDataWarrnambool said it did not anticipate any further inventory write-downs and that it expected trading conditions to stabilise in the second half of the year.
The dairy processor added that it anticipates being able to take advantage of the depreciation of the Australian dollar from fiscal 2010.
