Dairy processor Murray Goulburn says its export sales, which now account for over 51 per cent of its revenue, grew strongly in the year to June 2014 to $1.5 billion.
However, the company also noted that international dairy ingredients prices have been impacted by high inventories in China and the recent Russian trade ban on dairy imports, as well as production growth in exporting countries such as New Zealand and the European Union.
“Given global demand growth we anticipate some recovery in international commodity pricing but it is difficult to predict the timing and strength of this change.
“MG is carefully monitoring the impact of the Russian trade ban, particularly the impact on trade flows from the EU to other export destinations,” the company said.
The company also revised its full year forecast for the Southern Milk Region to $6.00 per kilogram of milk solids (i.e. the current farmgate price), down from a range of $6.15 to $6.30 per kilogram of milk solids given the current market conditions.
“In this market it is unlikely that MG can provide for any step ups in 2014/15 pricing unless there is a significant improvement in markets,” the company said.
“Over the next few weeks we will continue to assess the impact of the Russian trade ban and further assess China's re-entry in the market and provide regular updates to suppliers as required.”
Though MG reported a net profit of $29.3 million, down from $34.9 million the year before, the company says its sales revenue grew 22 per cent to $2.917 billion, and exports recorded 30 per cent growth year-on-year to $1.5 billion.
MG says all of its major divisions delivered growth, but particularly in exports in the Nutritional Powders and Consumer and Food-Service sectors.
MG’s managing director Gary Helou said: “International dairy food prices were at very high levels during the 2013/14 year, underpinned by the strong demand from Asia and the Middle East.
“Our focus on the value growth segments of Nutritional Powders and international Consumer and Food-Service dairy food exports, combined with the robust growth in MG’s milk supply helped MG deliver an exceptionally strong year.”
MG says its balance sheet was strengthened with total equity increasing by $59 million during the year, including $36 million gain from the sale of its stake in Warrnambool Cheese and Butter, which was recognised directly in equity.
MG also reported a significant improvement in safety performance.
“We’ve seen another year of significant progress in our group safety performance. MG’s most important asset is its people and our top priority must always be to keep our people safe,” Helou said.
MG says it has been impacted by the recent Russian trade ban on dairy imports.
