Murray River Organics: Almost $40 million lost in 2019-20

Embattled fruit company Murray River Organics is counting its losses that have tallied more than $116 million over the past four years.

Fix plan: Murray River Organics is pursuing an aggressive five-year turnaround strategy that management hopes will deliver a profit for the ailing Victorian company.

ORGANIC fruit producer Murray River Organics is two years into a five-year turnaround plan that appears far from bearing fruit following another loss-making year to the tune of almost $40 million.

The 2019-20 loss of $39 million brings the total losses since the Victorian company floated on the ASX in 2016 – the last year it turned a profit – to more than $116 million.

This is despite a successful capital raising of $25 million in March to free-up debt and progress the company’s ambitious restructure.

“Adverse weather” has been blamed, in addition to expenses tied up with restructuring the business’s farming operations, including getting out of its lease of a Colignan vineyard that led to write downs of $11.7 million.

That 750ha property near Mildura, Advinco Farm, is one of Sunraysia’s biggest dried fruit powerhouses and has since been leased to Golden Dried Fruits.

Tearing up the lease relieved MRO of annual farming costs of $10 million tied to the property.

Revenue was also down considerably to $48.3 million, a 19.5 per cent drop from last year, due to a reduction in private label sales, COVID-19 driven market closures affecting fresh table grape and export sales, and perhaps most importantly, extreme drought conditions and high water prices that hit farm profitability.

MRO chairman Andrew Monk said “the year was not without its challenges” including the coronavirus pandemic that “affected us on multiple levels across the business”.

“While the year has had its setbacks, we are well progressed on resetting and right sizing the company to build longer term value creation with a clear and realisable path to earnings growth,” Mr Monk said.

The essence of the plan is to shift from a largely wholesale business to a vertically integrated company that grows, processes and sells its organic own-branded products in major supermarkets.

MRO posted its first after tax loss in 2016-17 of $5.9 million, followed by $59.6 million in 2017-18 and $12 million last financial year.

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