Warrnambool Cheese and Butter (ASX: WCB) reported its full-year 2013 earnings today, keeping sales steady but slicing profit in half. Total revenue for 2013 clocked in at $496.5 million, essentially unchanged from last year's numbers.
But stagnant sales and high costs turned the company's profits sour. After-tax net operating profit dropped a whopping 50.7% to just $7.5 million. "FY 2013 has been a difficult and disappointing year, with results adversely impacted by flat international prices, a persistently high Australian dollar and high raw milk cost relative to market conditions," said Chairman Frank Davis in a statement today.
But although this year curdled the company's success story, its balance sheet remains within policy range, with debt comprising around 32% of the company's total assets. In the latter part of the year, Warrnambool's situation improved slightly with an uptick in international powder prices and a depreciating Australian dollar (which helps exports).
Looking ahead, the company expects prices to prove more profitable for 2014. A weakening Aussie dollar has expanded margins, while Warrnambool continues to churn ahead with various business improvement projects.
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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.
