Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Westland Milk turns to annual profit amid cost-cutting drive

Westland Milk turns to annual profit amid cost-cutting drive

By Tina Morrison

Sept. 28 (BusinessDesk) - Westland Milk Products, New Zealand's second-largest dairy cooperative, turned to an annual profit as it reduced costs, processed less milk and lifted payments to its farmer suppliers.

Hokitika-based Westland turned to a profit of $1.5 million in the 12 months ended July 31, from a loss of $10.3 million a year earlier, it said in a statement. Revenue rose 7.1 percent to $629.7 million even as the amount of milk received from suppliers reduced by 6 percent to 699 million litres. Selling, distribution and administration expenses fell 9.6 percent to $107.8 million while other costs of sales dropped 18 percent to $153.8 million.

Under the leadership of new chief executive Toni Brendish, who started in September 2016, the company has been running the ruler over its cost base as part of efforts to return to profitability and lift payments to farmer suppliers. In the latest year, Westland lifted its payout to its 342 shareholders by 28 percent to $338.7 million, a net average payout of $5.18 per kilogram of milk solids, up from $3.88/kgMS a year earlier. Chair Pete Morrison said the payout is still not industry competitive, and he reiterated the company expected to lift the payout this season to between $6.40 and $6.80/kgMS.

"Both board and management warned shareholders after our annual general meeting last year that we would not be able to return the company to an industry competitive payout in one season. We committed to doing so for 2017-18," Morrison said.

"This recovery bodes well for the future of our co-operative," he said. "When our new chief executive Toni Brendish commenced in September 2016, and quickly established a new finance team to work with her, she identified that it was costing Westland more to process its ‘bucket of milk’ compared with other dairy companies in New Zealand. Since then, management has embarked on a campaign to reduce costs and improve efficiencies. The result has been the removal of many millions of dollars in costs from the business."

Dairy products are New Zealand's largest commodity export and the local industry is dominated by dairy giant Fonterra Cooperative Group, the world's largest dairy exporter.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Reserve Bank: Ongoing Monetary Tightening
The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 3 percent from 2.5 percent. The Committee agreed it remains appropriate to continue to tighten monetary conditions... More>>

Statistics: Weekly Earnings Rise As More In Full-time Employment

Median weekly earnings from wages and salaries rose by 8.8 percent to $1,189 in the year to the June 2022 quarter, Stats NZ said today... More>>

Bell Gully: Uncertainty Ahead With New Unconscionable Conduct Legislation

new prohibition against ‘unconscionable conduct’ in trade is one of a number of changes to the Fair Trading Act 1986 that come into force from 16 August 2022. The new prohibition may have wide-ranging implications for many businesses... More>>

Electricity Authority: Imposes Interim Restrictions On Very Large Electricity Contracts

Consumers of electricity will be protected from potentially paying more than they should due to the impact of very large electricity contracts on wholesale prices, under urgent changes announced today by the Electricity Authority... More>>

Westpac: Economic Overview, August 2022 – Pushing Through

The New Zealand economy faces some lean growth in the year ahead as households’ budgets are squeezed, according to Westpac’s latest Economic Overview... More>>

Kiwi Group Holdings: Fisher Funds Acquires Kiwi Wealth Business

Kiwi Group Holdings Limited (KGHL) today announced the sale of Kiwi Wealth to Fisher Funds for NZ$310 million... More>>