‘Unwavering’: Milklab maker’s boss unfazed by $161 million loss

Milklab manufacturer Noumi is pinning its hopes on the continued growth of its prized brand to turn around a balance sheet battered by an expensive dispute settlement, high dairy prices, Russia-triggered geopolitical instability, and COVID-19 disruption.

Noumi (formerly Freedom Foods), which also makes other beverage and milk-powder brands including Australia’s Own, Vital Strength and Uprotein, on Monday unveiled profit, revenue, and earnings that all slid backwards in the 2022 financial year.

Milklab was the bright spot in Noumi’s 2022 results. Credit: Janie Barrett/SMH

The company suffered $161.1 million in net losses after tax, deepening from $38.6 million in 2021. Adjusted operating EBITDA and revenue tumbled by 68 per cent and 5 per cent respectively.

Noumi’s net losses were driven by its expensive settlement with a former supplier, US almond grower Blue Diamond, which took a $55.6 million bite, as well as a non-cash asset impairment of $95.7 million amid high input costs and rocketing farmgate milk prices, which have been passed on to consumers.

But the popularity of cult favourite Milklab drove a surge in plant-based beverage sales, one of the few bright spots in Noumi’s 2022 results.

Noumi chief Michael Perich says the company is still in the middle of a bumpy transformation phase.

Milklab sales rose 18.7 per cent to $49.8 million. More broadly, revenue from its plant-based beverage business was up 7.2 per cent to $164 million and adjusted operating EBITDA jumped 30.3 per cent to $33.4 million.

Noumi chief executive Michael Perich, who stepped into the top job after a spectacular corporate implosion in mid-2020, said he remained committed to the company.

“I’m absolutely excited about the potential within this business,” Perich said, pointing to Australia’s role as a “food bowl” to Asia.

“There were some rocky periods that we’ve had to go through,” he said, but his positiveness around returning to “medium to long-term sustainable, profitable growth”, was unwavering.

Perich was eager to point to growth in the plant-based beverages business, but conceded the company was still in the midst of a “bumpy” transformation phase that began after the discovery of $590 million in accounting irregularities, which sent its market cap and share price plummeting.

“We had headwinds in this year that were unforseen around pricing, COVID staffing-related issues. We have really worked hard around mitigating a lot of those,” he said. “There [have] been a lot of external factors that are really unforseen that have driven some of those [impacts on the business].”

The company will focus on growing Milklab’s brand by expanding sales in the South-East Asian market, which accounts for 11 per cent of the company’s revenue. Australia and New Zealand account for most of Noumi’s revenue (70 per cent).

Despite strength from Milklab and Australia’s Own, investors were unimpressed by the company’s overall performance, sending Noumi’s share price down 12.8 per cent to 20.5¢ by the end of Monday’s trading session.

“We’re just focusing on continuing to do what we’re doing,” Perich said.

“We’re aiming at delivering profitability leading to long-term growth in the company; I assume the share price should follow that.”

Noumi shares, currently hovering around 21 cents, are worth less than 10 per cent of their September 2018 peak of $5.30.

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