$20m loss sums up turbulent year for WCB
Warrnambool Cheese and Butter Factory has announced a loss of $19.9 million as revenue fell 16% to $441 million on the back of an “unprecedented downturn” in the dairy industry.
The company had announced a downgrade in expectations in June, suggesting the profit would come in between $16 and $18 million.
“This is a very disappointing result,” WCB’s CEO and Managing Director, John McLean, admitted. “After a period of excellent commodity price growth, the global financial
crisis and economic downturn prompted a collapse in international dairy commodity prices.”
Total milk intake grew by 8% to a record 922 million litres in the year. However, the collapse in commodity prices forced WCB, along with other major processors, to
announce a step-down in supplier milk prices, the first such decline in nearly 40 years.
A second milk price step down announcement was followed by an immediate supplier reaction and a considerable loss of milk supply. A reversal of this move, the consequent resignations of both the Chairman and CEO and a competitive opening price has now seen the company recover lost supply.
Sales volumes increased by 16% over those of 2008, with Sungold retail milk brand revenues growing by 44% over the year.
Markets reacted negatively to the news, with the share price down 8 per cent in late afternoon trade.