Dollar hits Warrnambool Cheese profit

WARRNAMBOOL Cheese and Butter's full year profit has halved because of the high Australian dollar.

A generic image of cheese.

THE strong Australian dollar and high dairy prices have hit Warrnambool Cheese and Butter's annual profit, but the company maintains a glass half full outlook.

Warrnambool's profit of $7.5 million in the year to June 30 was down 51 per cent from the previous year's $15.2 million.

The Victorian company produces Sungold Milk, Great Ocean Road cheeses and wholesale butter, cream and skim milk powder.

Revenue dropped slightly to $496.5 million in 2012/13, but income from exports fell by 24 per cent due to to the Australian currency's relative strength against the US dollar.

Chairman Frank Davis described the 2012/13 financial year as "difficult and disappointing".

But as the Australian dollar has fallen since May, international dairy prices and the company's margins have improved.

While not enough to offset the earlier negative impact in the 2012/13 year, the dollar's slide will benefit Warrnambool's performance in the current financial year, Mr Davis said.

"The substantial weakening of the Australian dollar versus the US dollar in recent months has provided a welcome margin lift across the export product group," he said.

The company has also recently negotiated sales at significantly higher prices than those achieved in the 2012/13 year, he said.