RELATED: Dairy farmers reeling
MURRAY Goulburn managing director Gary Helou will step down from his role after the dairy co-operative slashed its profit forecast by as much as 40 per cent and cut the price it pays farmers for milk.
Mr Helou will remain with the company to help with the transition to an interim chief executive officer.
He will also cease to be a director of MG Responsible Entity Limited, the responsible entity of the MG Unit Trust.
Following the MG trading update announced to the Australian Stock Exchange, the board and Mr Helou have agreed the stewardship of the company would be best served under fresh leadership.
Less than a year ago, MG was partially floated on the ASX, raising $500 million from investors.
On Wednesday, the company announced an expected net profit after tax of between $39 million and $42 million, well down on the $62 million it predicted in February.
MG also announced it expected to pay suppliers between $4.75 and $5 per kilogram of milk solids.
In February, it predicted a farm gate price of $5.60 per kilogram.
The co-operative cited a spike in the Australian dollar and a global dairy market which continues to weaken after China slashed its spending on bulk dairy imports and the situation has been compounded by Russia’s trade sanctions on many western products.
“During my time at MG, we have transformed the company’s capabilities and capacity and in the process delivered two consecutive years of premium milk prices for Australian farmers,” Mr Helou said.
“While maintaining this price has proven to be difficult in current market conditions, I firmly believe MG has the foundations in place to support a strong and successful business in the years ahead.”
MG chairman Philip Tracey said Mr Helou had made a “significant contribution” to the co-operative.
“(Mr Helou) has been a powerful driving force behind our transition to become a globally recognised, ASX-listed food business,” he said.
David Mallinson, currently executive general manager business operations, has been appointed interim chief executive of MG and MG Responsible Entity Limited.
Mr Mallinson is an experienced strategic, operational and financial leader and has held a number of leadership roles in the dairy industry during his career.
Before joining MG three years ago, Mr Mallinson was Fonterra Brands’ commercial director then Fonterra chief financial officer.
“MG is a great business with a strong growth future,” he said.
“I firmly believe MG’s value add strategy is the right direction for the company and I look forward to working with the MG team to execute the strategy with discipline and rigour in the weeks and months ahead,” Mr Mallinson said.
Chief financial officer Brad Hingle has also resigned, but will remain in the business to assist with the finalisation of the 2016 annual results.