Struggling dairy co-op Murray Goulburn has seen its share price drop to a record low this week, as it continues to battle low milk prices, and strong competition.
Shares in the agribusiness dropped this week to 60.5 cents, only a shade over a quarter of its original issue price of $2.10.
The company is undertaking a strategic review, announced on June 6.
“Although global commodity prices have shown some recovery since this time last year, whole milk powder and particularly skim milk powder prices remain under 10 year averages,” MG chief executive Ari Mervis said.
“This has been somewhat offset by firmer butter and cheddar prices,” he added. “We have also had regard to Global Dairy Trade auction results over the past two months and current futures pricing, both of which suggest some ongoing price volatility in global markets.”
Mervis said the strategic review would look at “all aspects” of the company’s strategy and corporate structure.
“I see this review as a fundamental next step to strengthen MG for the future,” he said. “While the previous decisions resulting from the manufacturing footprint review, including the announcement of three site closures were necessary, I do not consider them alone to be sufficient to move the business forward.
“Given the timeframes associated with the site closures, the expected financial benefits are not expected to be fully realised by MG until FY19.”
Mervis said an update is expected from the strategic review in August.
Meanwhile, other Australian dairy firms are faring quite well.
Bellamy’s, which has struggled in recent months, has seen its share price rise 25.7% after its fundraising announcement last week, to $7.24 on Monday night.
The a2 Milk Company had a 58 cent rise on Monday to $3.93, after it announced revenue would rise by $20 million to $545 million in FY17.