Murray Goulburn has slumped to a $371 million headline loss amid a revenue decline and flagged the prospect of asset sales or even a takeover from an ongoing strategic review.
In an announcement to the ASX on Tuesday morning, the nation's biggest milk processor said its sales dropped 10.3 per cent to $2.49 billion. Sales from its flagship Devondale brand fell 14 per cent, or $502 million, to $1.02 billion.
The headline result was heavily impacted by one-off costs of $405 million associated with the axing of the company's controversial milk supply support package.
The company announced an underlying net profit of $34.7 million but will pay no dividend. Gearing jumped from 29 per cent to 37.7 per cent.
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"MG has experienced a difficult year as a result of the significant reduction in milk intake and adverse seasonal conditions," chief executive Ari Mervis said.
"The [last] financial year has tested the strength and resolve of Murray Goulburn and its suppliers.
"A new management team is now in place and a comprehensive strategic review covering all aspects of MG's strategy and corporate structure, including the profit sharing mechanism and capital structure is accelerating."
That review has already yielded a "number of confidential, unsolicited, indicative proposals from third parties".
"These proposals have ranged from concepts around certain non-core assets to larger proposals including whole of company transactions," the company said.
Mr Mervis said the next few months would be "pivotal" for the future of the business.
Deutsche Bank is advising Murray Goulburn on the potential merits of the proposals.
The company is also battling a court case launched by the Australian Competition and Consumer Commission alleging it misled farmers about the likely milk price it would pay in the year after its sharemarket float.
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Shares in its listed offshoot traded above $2.50 in early 2016 but now sit at 62 cents.
In July, the company indicated it would have a total milk intake of 2.3 billion litres. That was a reduction but would not impact on the expected opening average farmgate milk price of $5.20 a kilogram of milk solids.
At the time, it forecast a final milk price of between $5.20 and $5.50 a kilogram of milk solids, although it warned that if the dollar remained elevated that could jeopardise that price.
Now the company is signalling it will pay more than $5.20 but will need to access $100 million from its profit-sharing mechanism to do so.