Troubled dairy company Bellamy's Organic has replaced its chief and provided the market with updated financial guidance for 2017.
CEO Laura McBain has been replaced by Andrew Cohen, the company's chief operations and strategy officer, who was today appointed acting Chief Executive Officer effective immediately.
The company said it is now expecting earnings before interest and tax (EBIT) for 1H17 to be $12-14 million, and EBIT for FY17 to be $22-26m, compared to $54m in FY16.
Bellamy's requested a trading halt followed by a voluntary suspension in mid December after suffering a $500m share plunge.
In the latest update, Bellamy's said the company’s revenue and profitability had been impacted by lower than expected demand for its infant milk formula, which led to increased inventory levels, excess ingredients and shortfall payments to suppliers.
Bellamy's said it has responded by amending a key manufacturing contract with Fonterra and implementing measures to reduce production and better manage inventory levels.
The board said it has also initiated a cost management program to reduce expenses throughout the business.
“The company continues to believe in the strength of its brand and products and global sales footprint,” Bellamy's said in a statement to the market.
“Bellamy’s is focused on building a sustainable business that can execute on the significant, long term opportunities in Australia, China and other markets, and deliver long term value to its shareholders.”
Despite media reports on possible class actions against Bellamy's in the wake of it's market collapse, no class actions have yet been served, the company said.
