Units in Murray Goulburn Co-operative Ltd. fell to the lowest since they began trading last year after the Australian dairy group slashed its profit target by as much as 50 percent because of lower milk prices and a resilient Australian dollar.
Shares in MG Unit Trust dropped as much 38 percent to A$1.335 apiece before trading at A$1.4025 at 11:55 a.m. in Sydney, the lowest since their trading debut in July. The local benchmark S&P/ASX 200 index on Wednesday rose 0.2 percent.
The group said its full-year net profit after tax is likely to be between A$39 million ($30 million) and A$42 million, compared with its October forecast of A$66 million to A$79 million. Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, last month cut its milk price forecast to a fresh nine-year low as oversupply depressed the global market.
“The board is very disappointed that MG could not ultimately generate milk prices for fiscal year 2016 either as disclosed in the product disclosure statement published in May 2015, or as revised and notified to suppliers and investors on 29 February 2016,” the group said in a statement.
Murray Goulburn, which also announced the departure of Managing Director Gary Helou, said it will accelerate efforts to switch to higher-margin ready-to-consume dairy foods from commodity products under the interim direction of David Mallinson while it looks for a new chief executive. Mallinson was formerly the general manager of business operations.