Dairy cooperative Murray Goulburn, which is partially listed on the Australian stock exchange, again lowered its profit forecast today (27 April) amid “very low” commodity prices and concerns over trading in China.
The dairy group said it now expected a net profit after tax of between A$39m and A$42m. In February the company predicted a net profit of about A$63m, lower than its original forecast for profits of approximately A$89m.
“The AUD:USD exchange rate and the continued strong performance of international ready-to-consume dairy food product sales to partially offset the underperformance of the ingredients and nutritionals segment as a result of the very low commodity prices,” Murray Goulburn noted.
Murray Goulburn also revealed its performance has been detrimentally impacted by changes to China’s list of products allowed to be sold on cross-border websites and enter China via the country’s free-trade zones tariff-free. The company said this will reduce its distribution milk pool, which determines the farmgate milk price, by A$60-100m. The company cut its forecast milk payments to farmers to A$4.75-5.00 per kilogram.
Announcing the news, the dairy group revealed that its managing director Gary Helou and CFO Brad Hingle are to step down.
The company also lifted the trading halt placed on its shares late last week. Shares plunged more than 42% during the day to close at A$1.24.