Murray Goulburn sours, CEO quits

Murray Goulburn Co-operative (MG) has announced the resignation of its CEO Gary Helou, following a revised profit forecast and cut in milk prices paid to farmers.

A performance review concluded that the forecast farmgate price of $5.60/kg milk solids (kgms) provided on 29 February 2016 was no longer achievable, and the price was revised to $4.75 to $5.00/kgms, a drop of up to 15%.

A milk support payment will ensure suppliers receive payments during 2016 equivalent to an FMP of $5.47/kgms; however, the cost of this will be recovered by MG from suppliers’ milk payments for up to three years to 2019.

MG’s forecast net profit after tax has been revised to between $39 and $42 million, compared with an earlier profit projection — announced in February — of around $63 million.

The company attributed the revised forecast to unfavourable movement in the AUD:USD exchange rate, lower than expected adult milk powder sales in China and a reduction in value of the milk supplies it currently holds.

David Mallinson, currently executive general manager Business Operations, has been appointed interim CEO. Chief financial officer Brad Hingle has also resigned from his position.

The MG board said it remains committed to a strategy of shifting MG’s product mix from commodity products to higher margin, value- added and ready-to-consume dairy foods.