Oceania Dairy Faces Steep Losses in 2023 Amid Revenue Decline
Source: The DairyNews
Oceania Dairy reported a significant loss of $19.1 million for the fiscal year ending December 31, 2023, according to its latest annual report. This marks a substantial increase from the $3.9 million loss recorded in 2022. The company's total revenue also declined, falling from $440.7 million in the previous year to $376.2 million.
Owned by Westland Milk Products and the Chinese conglomerate Yili, Oceania Dairy operates a production facility in South Canterbury, north of Glenavy. The annual report detailed that the company sold 39,471 tonnes of products to various subsidiaries of Yili, generating $316 million in revenue. This is a decrease from the 68,350 tonnes sold in the previous year, which had brought in $371.3 million.
A closer look at the revenue breakdown reveals that sales to customers within the Yili Group dropped significantly from $371.3 million to $240.29 million. However, revenue from external customers saw an increase, rising from $32.1 million to $56.7 million. Additionally, other sources of revenue, including milk sales, improved, going from $37.1 million to $79.1 million.
Oceania Dairy’s cost of milk, a critical input, is pegged to Fonterra’s milk price, which has yet to be announced for the year. The estimated price used in the accounts is $7.80 per kilogram of milk solids, based on Fonterra’s midpoint forecast of $7.50 per kilogram in December.
A closer look at the revenue breakdown reveals that sales to customers within the Yili Group dropped significantly from $371.3 million to $240.29 million. However, revenue from external customers saw an increase, rising from $32.1 million to $56.7 million. Additionally, other sources of revenue, including milk sales, improved, going from $37.1 million to $79.1 million.
Oceania Dairy’s cost of milk, a critical input, is pegged to Fonterra’s milk price, which has yet to be announced for the year. The estimated price used in the accounts is $7.80 per kilogram of milk solids, based on Fonterra’s midpoint forecast of $7.50 per kilogram in December.
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