Melbourne, Sept 1, 2008- Australian dairy producer Dairy Farmers, which last week agreed a $780 million takeover by the Australian unit of Japanese brewer Kirin Holdings , posted a 25 percent jump in earnings on Monday thanks to strong sales growth.
The firm said earnings before interest, tax, depreciation and amortisation for the year to June 30 rose to A$71 million ($61 million), before one-off items related to its ownership review, up from A$57 million a year ago.
Dairy Farmers Chief Executive Rob Gordon said the co-operative absorbed A$170 million in costs during the year, largely due to record prices for the milk it buys off farmers. "Despite this prohibitive cost environment... the lift in earnings can be primarily attributed to Dairy Farmers' turnaround strategy of investing behind high-margin branded products across key channels," Gordon said.
Sales revenue for brands including Dairy Farmers milk, Coon cheese and Ski yoghurt, rose 11 percent to A$1.31 billion.
Dairy Farmers' 2,000 farmer shareholders will vote on the takeover by Kirin's Australian unit National Foods in November, and the board has recommended the deal.
National Foods has agreed to sell some operations to meet approval from the competition regulator. Analysts estimate the deal with Dairy Farmers would boost its share of the Australian milk market to 61 percent from 36 percent, and its share of yoghurt sales to 53 percent from 28 percent. ($1=A$1.17)