Up-for-sale Australian co-operative Dairy Farmers has reported a double-digit jump in profits.
Net profit for the 2008 financial year was A$13.7 million ($16.8 million), up from A$10.6 million the previous year, while earnings before interest, tax, depreciation and amortisation were up 25 per cent at A$71 million.
Chiefexecutive Rob Gordon said earnings were at the top end of guidance and had been achieved in a particularly hostile operating environment.
"The lift in earnings can be primarily attributed to Dairy Farmers' turnaround strategy of investing behind high-margin branded products across key channels, which has been underpinned by a strong innovation pipeline, sustained cost-out initiatives and continued price recovery from the marketplace."
Revenue was up 11 per cent to A$1.3 billion and the company had absorbed an additional A$170 million in costs, mainly because of record farm gate milk prices, Gordon said.
National Foods - owned by Japan's Kirin Holdings - last week agreed to pay A$5.65 a share for Dairy Farmers, with an enterprise value of A$910 million made up of cash and assumed debt.
Kiwi dairy giant Fonterra had lodged an interest in buying the co-operative with the Australian Competition and Consumer Commission but withdrew in June, shortly after buying the yoghurt and dairy dessert business of Nestle Australia.
However, Fonterra could still get some Dairy Farmers assets with National Foods agreeing to sell milk processing plants, depots and drinking-milk distributions contracts in New South Wales and South Australia to gain approval from the Australian commission.
The sale of Dairy Farmers was subject to court approval and a shareholder vote expected in November.
