Murray Goulburn (MG) has reported lower first half profits on the back of global dairy commodity volatility, but its revenues rose in line with its changing product focus.
Thanks to low dairy commodity prices, MG's net profit after tax was $10 million for the half to December 2015, down from $15.2 million in the previous corresponding half.
The company described the result as solid result given that dairy commodity prices are trading at near record low levels.
MG also noted that it has built on its revenues in the first half to December, reflecting a shift away from volatile commodities, and toward higher-value dairy foods.
Overall, the company saw revenue of $1.3 billion, up 3.7 per cent on the previous corresponding half. The dairy foods segment saw outstanding revenue growth both domestically and internationally, according to MG, with revenues of $694.7 million, up 27.2 percent.
The company says around 70 percent of sales volume now in value-added or ready-to-consume dairy foods products. MG also announced that it is poised to launch Devondale Natra Start infant formula which will be sold in China, where the company already sells its Devondale UHT and consumer milk powder products.
MG managing director, Gary Helou said: The first half has seen the continuation in the decline in Chinese imports of commodity dairy ingredients and the ongoing Russian embargo on dairy imports. This has been compounded by increased European milk supply, resulting in a period of significant oversupply in global dairy commodity markets, driving commodity prices towards record lows.
“Against this backdrop, MG has continued to perform well, with substantial further progress made in moving product mix from commodity products towards higher-margin, value-added or ready-to-consume dairy foods,” Helou said.
