FIXED price milk contracts have contributed significantly to a $19.9 million after tax loss for listed dairy processor Warrnambool Cheese and Butter Factory.
WCB chief executive officer and managing director John McLean this week said the company under former CEO Neil Kearney had contracted large quantities of milk at fixed prices in the high 40-cent range.
But the last of the fixed price contracts would finish at the end of this financial year, Mr McLean said.
WCB reported sales revenues of $441 million last year, down 16 per cent or $84 million.
Earnings per share for the period were a negative 50.2c and the net tangible asset backing of the stock decreased by 24 per cent to $2.38 a share. The company declared no final dividend for shareholders.
Mr McLean said the loss was disappointing, but he expected growing export ingredients and domestic milk sales would help combat the impact of low international commodity prices and a rising Australian dollar.
Mr McLean said domestic retail milk prices had not fallen and values had risen for the GOS baby formula product from WCB’s joint venture Great Ocean Ingredients plant, expected to be in full production by the end of spring.
Overall WCB sales volumes increased by 16pc over 2008 and Sungold retail milk revenues grew by 44pc during the year.
Export cheese, milk powder and butter commodity prices had shown slight improvement, Mr McLean said.
