The group announced after-tax earnings of $4.2 million for the year ended March 31, an 87.8 per cent slump compared to the prior year’s $30.1m result.
“The decrease in profits is due to declines in global international commodity prices and a high raw milk cost relative to market conditions,” the firm said in a statement.
Ominously for farmers, who have been hit by high-profile price reductions from Murray Goulburn and Fonterra over the past few weeks, WCB suggested a further blow was imminent.
“Raw milk cost (farmgate price) is expected to be more closely aligned with market conditions for the coming 2016-17 milk season,” the group said.
The market conditions to which it refers have forced two major downward revisions to Murray Goulburn’s earnings outlook this year as well as sudden — and sharp — reductions to the farmgate milk price on which local farmers rely.
The conditions are seen unlikely to improve soon, with Warrnambool Cheese and Butter warning on prolonged pain for the industry.
“International dairy prices are expected to remain weak, with global milk production remaining high and a limited change in demand,” the dairy firm said.
The firm opted not to declare a dividend, in line with last year’s decision.
Source: The Australian