A global dairy supply glut is taking its toll on the 2015 results of Australian dairy processors including Murray Goulburn and Bega Cheese.
Murray Goulburn (MG) said its revenue of $2.87 billion for the year to June 2015 was down 1.5 per cent on the previous year, reflecting product mix optimisation in the face of declining commodity prices. MG's Net profit after tax (NPAT) was $21.2 million.
However the company says it saw strong growth in its strategic ‘ready-to-consume’ dairy foods business - which includes fresh milk, UHT milk, cheese, butter and cream - which saw revenues of $1.13 billion, up 29 percent on the prior year.
“We faced difficult external factors with falling commodity prices throughout the year and a strong Australian dollar in the first half of the year, but managed those levers within our control to contain costs, support cashflow and optimise our product mix,” MG managing director, Gary Helou said.
“In particular, MG’s Dairy Foods segment enjoyed a stellar year, growing strongly both in the highly competitive Australian domestic market and in key target markets internationally. The segment delivered 29 percent revenue growth, an outstanding result.”
Bega Cheese, meanwhile, announced NPAT of $12 million for 2015, down 81 per cent on the previous year, which it attributed to global commodity prices. However it generated revenue $1.1 billion, an increase of $43 million.
Bega said that while the result was down on the same period last year - which included the sales of Warrnambool Cheese and Butter shares - the business has responded well to a substantive and sustained contraction in global dairy commodity prices throughout the year and strong competition for milk supply.
“Bega Cheese has continued to invest in the future, adding capability and capacity in higher value add consumer goods and nutritionals platforms,” Bega's executive chairman Barry Irvin said.
“It is pleasing to see that these strategic investment initiatives have enabled the business to maintain its growth momentum even though the global dairy industry has seen a major contraction in the value of dairy commodities.”
