News briefs: Wimm-Bill-Dann and Australian dairy

By Neil Merrett

- Last updated on GMT

Related tags: Dairy farmers, Profit

This week, Wimm-Bill-Dann posts strong half-year growth on the back of across-the-board sales improvements, Fonterra is reportedly considering increasing yoghurt production and Dairy Farmers records a profitable 2008.

Wimm-Bill-Dann defies market uncertainty

Russia-based dairy group Wimm-Bill-Dann says it has posted a 30 per cent improvement in half-year sales to $1.4bn after increasing revenues across all three of its business segments.

Operating profit for the six-month period ending 30 June was up by 16.3 per cent to $126m, helped by surging sales in the group’s baby foods division and a reduction in year-on-year net cost expenses, the company said.

Operating margins were down by a single percentage point to 8.4 per cent compared to the same period last year.

Group chief executive Tony Maher said that the performance reflected the company’s ability to offset the global increase in food prices and other financial uncertainties.

Despite the slowdown in market growth we continued to improve our market share in all of our business units,”​ he stated.

Fonterra plots yoghurt boost

Fonterra says it is looking to capitalise on a recent acquisition from Nestle to step up its presence in the Australian market for yoghurts and dairy desserts, according to news reports.

Earlier this week, the company took control of a Nestle yoghurt and dessert factory in Echuca, which Fonterra says that it hopes to bring up to absolute capacity, the Australian Broadcast Corporation (ABC) reported.

Fonterra purchased the plant as part of a wider deal for Nestle’s yoghurt and dessert operations within Australia back in June. Under the deal, the company will also produce Nestle brands under license in the country.

A spokesperson for the group said that Nestle had a number of strong yoghurt and dessert brands in the country, and it would look to meet strong demand for them, the ABC stated.

Dairy Farmers profits pre-sale

Australia-based cooperative Dairy Farmers says it has posted a 25 per cent increase in operating profit to AUS$71m for the 2008 financial year, despite the ‘hostile’ financial environment.

The company, which last week announced it had reached agreement to be purchased by Kirin-owned National Foods, said it had profited over the period from focusing on higher-margin branded goods in particular.

Rob Gordon, chief executive of the cooperative, said that the performance had allowed the group to absorb an AUS$170m increase in costs due to record payouts for its farmer members.

“During the period, Dairy Farmers posted an 11 per cent increase in sales revenue from AUS$1.18bn in fiscal 2007 to AUS$1.31bn in fiscal 2008,”​ he stated. “This trend was particularly evident in the retail channel, where sales increased by 17 per cent.”

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