MG revenue of $2.8 billion is down 3.3 percent compared to FY15.
Murray Goulburn has announced financial results for the full year ended 30 June 2016, with revenue of $2.8 billion, down 3.3 percent compared to 2015.
- Net Profit After Tax (NPAT) attributable to shareholders and unitholders of $40.6 million
- Farmgate Milk Price (FMP)1 of $4.80 per kilogram milk solids (kgms) impacted by lower commodity price
environment and increased costs
- Continued strong growth in Dairy Foods segment with revenue of $1.3 billion, up 17.2 percent on FY15
- 3.5 billion litres of milk received, down 2.5 percent compared to FY15
- Suppliers supported with $183 million Milk Supply Support Package
- Closing net debt of $480 million with gearing of 29.0 percent
- Successful execution of strategic projects with new consumer cheese cut and wrap facility completed
(commissioning underway) and successful implementation of SAP
- Fully franked dividend/distribution of 7.41 cents for the full year including a fully franked final
dividend/distribution of 3.91 cents per share/unit
Commenting on the result, MG’s interim Chief Executive Officer, David Mallinson, said:
“FY16 has been a challenging year for our co-operative. We faced an environment comprised of very challenging macro settings, including sustained low commodity prices, a volatile Australian dollar, changes in Chinese regulations, and difficult seasonal conditions across many of our key regions.
“This has placed our suppliers and Australian dairy farmers generally in a very difficult environment. The Board, MG’s management team, and I personally have also acknowledged to all our key stakeholders that MG’s FMP downgrade so late in the year added to the challenge of FY16. Today we reported a final FMP for FY16 of $4.80 per kgms – in line with our April revised earnings guidance.
“At the time of our revised earnings guidance in April, MG made the decision to support our suppliers for the remainder of the financial year through a Milk Supply Support Package (MSSP). At the close of the year, this support totalled $183 million, net of $7 million of early repayments. This delivered an average cash price for milk to our suppliers of $5.53 per kgms, after two consecutive years of FMP above $6.00 per kgms. The MSSP is larger than originally anticipated predominantly on account of incentives payable as a result of stronger than forecast milk receipts in May and June.
“The Board’s intention with the MSSP was to support suppliers’ cash flow in the final months of the financial year, recognising the lateness of the change in milk price. The decision to recoup over three years was a recognition of a need to spread the financial burden for suppliers, minimising the financial impact in any one year.
“Board and management remain focused on mitigating the impact of the MSSP and today we are pleased to announce we have identified a program of cost efficiencies to deliver an additional $50 million to $60 million per annum during FY18 with $10 million to $15 million of this amount to be delivered in FY17.
“MG’s Dairy Foods business continued to deliver consistent growth in very challenging conditions, in particular the performance of the Devondale brand which continues to grow and now has annual sales of $580 million (up 45 percent from FY15) – a substantial brand platform to continue to build and add value to our business.