Financial performance
The following are financial highlights and key performance measures for fiscal 2015:
- Revenue of $454.1 million, down $154.8m or 25.4%
- Net operating profit after tax – $34.3m, an increase of $13.0m or 61.0%
- Earnings before interest, tax, depreciation and amortisation (EBITDA) – increased by $11.9m or 26.3% to $57.1m
- No final dividend was declared for FY2015 and we do not intend to declare any as the company will retain cash for investment into the business for growth, investment and
- development.
Change in senior management
As of April 1, 2015, Kai Bockmann, president and chief operating officer of Saputo’s dairy division (International), assumed the leadership position in WCB as WCB’s president
and chief operating officer. I would also like to thank and acknowledge the contribution that recently retired chief executive David Lord brought to WCB during his tenure.
New acquisition
On March 2, 2015, WCB announced that it had entered into an agreement to acquire the everyday cheese business of Lion-Dairy & Drinks Pty , for a total cash consideration of $137.5 million, subject to closing adjustments. The transaction was completed on May 25, 2015. This transaction will allow WCB to increase its presence in the consumer branded everyday cheese products segment in Australia. However, for fiscal 2016 the addition of the everyday cheese business to WCB’s portfolio is expected to make a very minimal contribution to profits.
Outlook
WCB intends to continue to improve its efficiencies, while remaining committed to producing quality products, innovation and growth. The company intends to accelerate its growth activities, invest in capital projects, increase manufacturing capacity, grow milk intake and create new opportunities.
As for the marketplace, at the end of May we had highlighted for fiscal 2016 that international dairy prices were expected to remain weak, which would exert downward pressure on the company’s profitability. Currently, and in line with our expectations, dairy prices remain weak and in particular, the price of certain dairy products has fallen again in recent weeks putting additional downward pressure on company profitability.
This is contrasted to higher international selling prices which the company benefited from in the prior year. Industry experts have recently pushed back expectations on price recovery to late 2015, early 2016. The Australian dollar is currently lower than the fiscal year 2015 average, but remains volatile.
