News

Huge jump in profits

By Country News

Freedom Foods Group has posted a half-yearly operating profit of $8.9million before tax, up 17.6 per cent on last year’s result, with dairy operations in Shepparton achieving significant growth.

The company released the results for June to December 2018 on Thursday, revealing large gains in nutritionals, dairy and plant-based products.

Overall sales increased by almost a third to $209million.

The company’s Shepparton factory has grown off the back of increased demand in Australia, China and South-East Asia, with higher production levels and increased prices for cream and milk protein contributing to the positive results.

Freedom Foods managing director and chief executive officer Rory Macleod said the results left the company well positioned to grow its key food and beverage sectors.

‘‘As outlined in July 2018 — based on the current portfolio, product range and new contracts with key customers coming on-stream in the first half of financial year 2019 — the group expects net sales revenue in FY 2019 to be in the range of $500million to $530million,’’ Mr Macleod said.

‘‘This growing demand in dairy, plant-based beverage, cereal and snacks reflects the positive impacts of structural change within the Australian dairy industry, demand from customers for the group’s expanded operational footprint and increasing brand penetration providing for increased market share in key channels and categories in Australia, South-East Asia and China.

‘‘Major capital expenditure projects — including the upgrade to the Shepparton UHT operation, nutritionals, yoghurt and UHT bottle capabilities — are generally on plan.

‘‘New product revenue streams from these major capital expenditure projects are expected to materially positively impact sales and earnings into FY 2020 and beyond.’’

The company has invested a total of $370million over the past three years towards the development of its four sites, including $33million on the expansion of the Shepparton factory.

Total dairy milk volume processed at the Shepparton site for the 2019 financial year is currently estimated at more than 250million litres, a significant increase from volume processed of about 140million litres in the 2018 financial year and 80million litres in 2017.

The completion of the Shepparton facility will allow for increased capacity in the one-litre production line, as well as upgrading processing capability, downstream packaging and increasing processing capacity to 500million litres/year, up from 300million litres/year, which is expected to be online from July.

Sales of dairy products in 2017-18 increased by 49.4 per cent, while nutritionals, including protein powder, registered a huge jump of 698 per cent to $14.4million in sales.