Warrnambool Cheese says annual results will be better than expected

Warrnambool Cheese and Butter Factory (WCB) was expecting its 2013 net profit to fall by at least 80 per cent, but the publicly listed company has now issued a more optimistic forecast.

WCB, which made the April forecast amidst subdued international commodity prices, the high Australian dollar and ongoing competition for milk, now says it expects its net profit to come in at about 52 per cent below that of last year.

"The recent improvement in trading conditions and overall business performance have provided a welcome lift in 2013 full year profits, and we expect the continuation of these factors will contribute to improved earnings in 2014," said WCB chief executive David Lord.

He pointed to improved trading conditions, which saw international dairy prices rise to record highs in Q4, and the considerable depreciation of the Australian dollar against other currencies.

He also pointed to business improvement projects and investments that were contributing to a positive product mix change and higher margins.