With revenue down five per cent and adjusted operating earnings before interest, taxes, deprecitation, and amortisation (EBIDTA) dropping 68 per cent to $7.3 million, noumi continues to weather the effects of its previous life as Freedom Foods Group as well as current challenging business conditions. Its net loss after tax was $161.1 million.
Snapshot
- Net revenue: $522.3m, down 4.6%;
- Adjusted operating EBITDA: $7.3m, down 68%;
- Statutory net loss after tax: $161.1m;
- Plant-based sales: 89.7ML, up 3.4%
- Dairy UHT sales: 246.3ML, down 3.8%;
- Lactoferrin sales: 21T, down 23.3%;
- Milklab sales: 49.8ML, up 18.7%; and
- Total export sales: 130.4ML, up 15.7%.
Noumi faced the same challenges as much of the business world – Covid impacts, geopolitical instability, rising transport and energy costs, workforce availability, and supply chain disruptions – compounded by large increases of the farm gate milk price.
Its massive 68 per cent drop in adjusted operating EBIDTA did not include discontinued operations, restructuring costs, the US litigation settlement, and onerous contracts provisions. The company said it was because of impacts on sales volume, input cost inflation and productivity.
As the business sought to distance itself from the Freedom Foods Group legacy, it rebranded, offloaded its Cereals and Snacks division to Arnott’s Group, sold its seafood unit, and repositioned itself on the remaining Plant-based Beverages and Dairy & Nutritional divisions.
Dairy & Nutritionals accounts for 67 per cent of revenue, Traded Milk two per cent, and Plant-based Beverages 31 per cent.
Noumi’s statutory net loss of $161.1 million was due to the settlement of US litigation of $55.6 million and one-off non-cash asset impairments of $95.7 million. Restructuring costs were $6.5 million and onerous contracts $4.7 million.
Flagship brand Milklab and the Plant-based Beverages business continued to be the company’s bright spot, with revenue up 7.2 per cent to $164 million and adjusted operating EBITDA up 30 per cent to $33.4 million.
CEO Michael Perich said the division now accounts for almost a third of group sales and Milklab’s “stellar run” continues with sales up 26.4 per cent on FY21. The brand Australia’s Own sales were up 16 per cent.
The same couldn’t be said for the Dairy & Nutritionals business, with Perich saying the company was “very disappointed” with its financial performance.
Dairy & Nutritionals was significantly affected by cost inflation and Covid impacts on key operational turnaround initiatives. Its net revenue was down 9.1 per cent ($36 million) to $358.3 million. 1HFY22 was impacted by a $10 million Lactoferrin disruption and in 2H, cost inflation had an $8 million impact and masked productivity gains in Q4.
The company said the revenue drop was mainly due to lower traded dairy milk sales, removing unprofitable dairy product lines and a difficult macro-operating environment. Excluding traded dairy milk, net revenue was up 0.4 per cent.
Perich said while it hoped to deliver improved results in FY23 and was negotiating with export customers to pass on higher raw milk prices, it was unlikely to fully recover price increases in FY23.
A bright spot was an increase in exports by 20 per cent, now accounting for 30 per cent of revenue, up six per cent on FY21. The company said it was focusing on growing Milklab sales into South-East Asia, which is understandable now that it is facing another court action regarding an alleged distribution contract for the European market.
Australia and New Zealand take up 70 per cent of noumi’s business, China 19 per cent, and South-East Asia 11 per cent.
