Murray River Organics posts massive loss

A POOR harvest last year continues to plague organic food producer Murray River Organics, which has posted a massive $59.6 million loss.

A POOR harvest last year continues to plague organic food producer Murray River Organics, which has posted a massive $59.6 million loss.

The loss after tax for the year ending June 30 follows a tumultuous period for the 10-year-old company that saw the resignation of its entire board in February, the appointment of two chief executives within five months earlier this year and the gradual exit of founders Jamie Nemtsas and Erling Sorensen.

The Victorian company’s net sales rose to $68.5 million in 2017-18, up from $48.5 million in the previous year.

But the result was overshadowed by its staggering loss, which has been blamed on a litany of factors including the effects of a low-quality, low-volume 2017 harvest.

The company, which listed on the ASX in December 2016, operates more than 4900ha of farmland in Sunraysia, including the largest organic dried fruit properties in Australia.

Delays have also plagued new manufacturing and packaging facilities in Dandenong and Sunraysia, and the company has borne “significant costs” from the departure of seven directors.

New chief executive Valentina Tripp was installed in April in an attempt to turn the company’s fortunes around. Previously of Simplot and Top Cut Group, Ms Tripp is heading a cost reduction program whose benefits are expected to materialise next year.

“FY18, like FY17 has not been a good year for shareholders of Murray River Organics, but the turnaround is underway with early benefits being realised,” chairman Andrew Monk said.

Net bank debt has almost doubled to $44.8 million, up from $28.6 million in 2016-17, with gearing at 224.5 per cent.

Murray River Organics was listed on the Australian Securities Echange in December 2016 for $1.30 a share. Today it was trading at 31 cents a share.