Jamie Gray is a business reporter for the NZ Herald

Australia's Murray Goulburn loses 3rd director after downgrade

Photo / iStock
Photo / iStock

Australian dairy giant Murray Goulburn has lost its third director in the aftermath of last week's profit downgrade while its ASX-traded units have almost halved in value.

The co-operative, which competes head-to-head with New Zealand's Fonterra across the Tasman, said Kiera Grant had resigned from the board less than than two months after her appointment.

Chairman Phil Tracy said was "regrettable" that the board had lost an experienced director before she had had an opportunity to contribute.

"However, we completely understand Ms Grant's decision in the circumstances," Tracy said in a statement.

"The board has a lot of work to do to win back the support and confidence of our supplier/shareholders and in the interim is understandably working in a difficult stakeholder environment," he said.

"This situation could not reasonably have been expected when Ms Grant agreed to take on the role in March," he said.

Units in Murray Goulburn have fallen by A$1.02 per unit, or 47.6 per cent, to A$1.12 since last week's downgrade.

On Tuesday, Murray Goulburn - Australia's biggest dairy foods company - said supplier-director Max Jelbart had announced his resignation due to ill health.

His departure follows the resignation last week of managing director Gary Helou, and chief financial officer Brad Hingle after the company said low world dairy prices would mean another major earnings downgrade.

Murray Goulburn said then that its farm-gate milk price of A$5.60 per kg of milksolids was no longer achievable. It now expects a price of A$4.75 to A$5/kg to be paid this year.

In February, the company, which listed its units on the ASX last July, forecast its annual net profit would come in at A$63 million against a prospectus forecast of A$89 million.
In last week's statement to the ASX, Murray Goulburn said it expected its net profit to fall to A$39 million to A$42 million.

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