Murray Goulburn narrows half-year loss as ACCC delays Saputo takeover call

A one-off tax charge has dragged Murray Goulburn to a hefty half-year loss, as it awaits an ACCC call on the Saputo bid.

Murray Goulburn chief executive Ari Mervis. (Aaron Francis/The Australian)

Troubled dairy producer Murray Goulburn has delivered a heavy loss in its half-yearly results, impacted by a number of milk suppliers ceasing to supply the company, which was partially offset by efforts to reduce costs.

The group booked an after tax loss of $27.5 million for the six months to 31 December, narrowing the $31.9m loss it posted for the same period a year prior.

It comes after the company announced in October it would cut 60 jobs as a result of a reduced dairy supply.

The loss for the half included derecognition of the Group’s deferred tax balances relating to temporary differences, resulting in a one-off tax charge of $62.7m.

Murray Goulburn (MGC) recorded a net profit before tax of $35.1m for the half, up from a net loss before tax of $47.8m in the same period last year.

Sales generated revenue of $1.12 billion, compared to the near $1.18bn it booked the previous year.

It comes after the review of the sale of Murray Goulburn to Canadian private dairy company Saputo was delayed by Australian Competition & Consumer Commission, which is now expected to be released on March 1.

Murray Goulburn confirmed that the $1.31bn sale is expected to be completed by June 30, should it be approved by the ACCC, the Foreign Investment Review Board and by the company’s shareholders.

In its results statement, the company said the first-half loss doesn’t necessarily mean a significant full-year loss.

“The seasonality of the business, which is primarily influenced by the timing of milk intake, results in higher levels of inventory and generally, in the ordinary course, higher debt at the half year. Inventories are then sold down during the second half of the year,” the company said.

“The result for the half year is therefore not an accurate indication of the result expected for the second half of the year.”

For the full 2017 fiscal year, the company reported a loss of $370.8m, with revenue down 10.3 per cent to $2.5bn after it’s intake of milk fell 22 per cent for the year.