Murray Goulburn halts share trading

Murray Goulburn halts share trading


Business
Murray Goulburn has told the Australian Securities Exchange it is reviewing the impact of market conditions on its 2016 outlook.

Murray Goulburn has told the Australian Securities Exchange it is reviewing the impact of market conditions on its 2016 outlook.

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Shares in Murray Goulburn’s special unit trust have been placed in a trading halt until next week, as Australia's biggest milk processor revises its earnings outlook

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Shares in Murray Goulburn’s (MG) special unit trust have been placed in a trading halt until next week, as Australia's biggest milk processor revises its earnings outlook.

The halt is expected to last until next Wednesday.

Amid sluggish global dairy market conditions units in MG’s non-voting listed trust closed 0.5 per cent lower on Thursday at $2.14.

This compared with the broader market gaining 1pc.

A MG statement to the Australian Securities Exchange (ASX) said the farmer-owned co-operative would review the impact of market conditions on its 2016 outlook.

Global dairy prices have failed to rebound as expected amid a persistent oversupply of milk powder and other commodity products, stemming for Russian sanctions and with the world's biggest dairy importer, China, stepping out of the market.

MG was winded again last week after China temporarily banned the sale of foreign powdered and UHT milk on its cross-border website.

The co-operative, which has almost $3 billion in annual export and domestic sales, said it did not expect the short ban to have materially hit earnings.

The company half-year financial results in February confirmed it would not achieved its profit forecast outlined in prospectus last July.

It said at the time it expected to generate full-year net profit of about $63m.

This compared with its prospectus forecast of $89 million, and previous warnings to investors that its net profit would be between $66m and $86 million if global dairy prices didn't recover as expected.

Despite missing its prospectus target, the co-operative maintained its farm gate price of $5.60 a kilogram milk solids.

Last August, Theo Spierings, the boss of the world's biggest dairy exporter, NZ-based Fonterra, said the price Australian farmers were being paid for their milk did not reflect the collapse in global dairy commodities.

His comments drew some qualified support from the likes of Bega Cheese executive director, Barry Irvin, and particularly some market analysts who have been uneasy with MG’s industry-leading farmgate payments and optimistic earnings expectations. 

"What you cannot do is pay money that you have not earned," Mr Spierings said.

NZ milk market payments have slumped 50pc in the past 18 months.

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