Australian food group Warrnambool Cheese and Butter Factory booked a 30.9% decline in first half profits, which dropped to A$9.6m (US$7.58m) due to difficult conditions in the dairy industry brought on by the drought and lower commodity prices. However, the company has predicted a “satisfactory” full year result.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
During the half the company saw increased sales volumes, with revenue growing from $182.6m for H12005 to $183.2m for the first half of fiscal 2006. However, this was not enough to offset the direct profit impact of commodity prices, which were 6.8% lower than the comparable period of last year.
Australian milk production is expected to fall 10% in 2007, the company said. Nevertheless, Warrnambool was able to increase its milk intake by 2% during the period.
“While the decline in world commodity prices and a strong Australian dollar have impacted results, it is encouraging that we have been able to mitigate these factors to an extent with increases in milk intake and production and through operating efficiencies gained from recent plant upgrades,” WCB CEO John McLean said.
The company said that early indications show that profitability in the second half of 2007 will not decline to the same extent, adding that it is on track to achieve a satisfactory full year result.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
