Gary Helou, managing director of Australia's biggest dairy company, Murray Goulburn, has resigned after the company lodged its second major earnings downgrade so far this year.
The company, which competes head-to-head with New Zealand's Fonterra in Australia, said its farm gate milk price of A$5.60 per kg of milksolids was no longer achievable. It now expects a milk price of A$4.75 A$5.00 a kg to be paid this year.
In February, the company - which listed its units on the ASX last July - forecast its net profit would come in at A$63 million against a prospectus forecast of A$89 million.
In today's statement to the ASX, Murray Goulburn said it expected its net profit to fall to A$39 to A$42m. The company said it would introduce a milk supply package equating to A$5.47 a kg to protect its long term milk supply in 2016.
The company said in February that achievement of $5.60/kg milk ptice was based on a number of factors including there being no unfavourable changes to the exchange rate and the continued strong performance of international ready-to-consume dairy food product sales to partially offset the underperformance of the ingredients and nutritionals segment.
These factors had not eventuated, it said.
Murray Goulburn said Helou would step down from his role, but would remain with the company for a short period to assist with the transition to an interim chief executive officer while a search for a successor is undertaken.
"Following the Murray Goulburn trading update announced to the ASX today, the board and Helou have agreed that the stewardship of the company going forward will be best served under fresh leadership," the company said.
A former Fonterra Australia executive, David Mallinson, who is currently Murray Goulburn's executive general manager business operations, has been appointed interim chief executive.