Murray Irrigation has achieved a break-even earnings before income tax result for the first half of the 2016-17 financial year.
Murray Irrigation chair Mark Robertson was pleased the turnaround plan that was put in place three years ago under Bruce Simpson’s chairmanship — which focused on the three drivers of price, volume and cost — was now starting to deliver with this positive financial result.
Mr Robertson said a lot of hard work had gone into re-aligning a modernised network on budget, on time and with improved efficiency in the delivery to customers.
‘‘Our new customer approach is starting to make an impact on an individual farm level and re-connecting Murray Irrigation back into the business of agricultural outcomes,’’ he said.
‘‘And our relentless reduction in costs is making the business much more accountable for the bottom line.’’
Chief executive officer Michael Renehan said ‘‘we have achieved this result through a strong focus on reducing operational costs across the business as we move from manual to automated operations’’.
‘‘We have been particularly pleased how our staff have really got behind a number of challenging outcomes to deliver this result,’’ he said.
However, Mr Renehan cautioned that while these outstanding half-year results were a strong indication of what the business could achieve, the company was still forecasting an overall loss for the full financial year.
‘‘We are extremely pleased to report a break-even result for the first half of the financial year, however, we still have a lot of work ahead of us to maintain this momentum,’’ he said.
‘‘To help us achieve this, we are going out to our customers directly to hear what they see as important as we transform the business.’’
Murray Irrigation will host a series of customer feedback groups throughout March to collect feedback on a range of topics that will inform the company’s decision-making process.
Mr Renehan said some of the recent cost saving measures included a reduction of the Murray Irrigation vehicle fleet, re-negotiated existing supplier contracts as well as the implementation of a competitive procurement process.
‘‘All these initiatives are building in a lower cost-base as we leverage off the new technology currently being installed.
‘‘The high allocation of water has been a positive as we are now delivering more water on-farm, but the impact of this increased volume will come through in the second half of the financial year.
‘‘Indeed, water volumes were actually in line with last year due to a late start to the season.’’
Mr Renehan said other key business activities had also helped achieve the successful financial result.
‘‘The delivery of environmental water and the Snowy Advance project have significantly increased revenue for the company,’’ he said.
‘‘Coupled with a price increase of 7.8 per cent last year, this result indicates what can be done in this business to turn the company around.’’
Murray Irrigation will provide a full 2016-17 financial year report at the company’s annual general meeting to be held late this year.