Murray River reports $22.2m half-year loss as aftershocks reverberate
Food & Agriculture
Food & Agriculture
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Murray River Group is struggling with the after-shocks of a business in turmoil, as it reports a $22.2 million half-year loss.
The organic fruit grower (ASX:MRG) blamed the December half result on four issues:
That loss did include costs associated with restructuring the company and write downs, however.
Murray River reported $21.1 million in expenses relating to “inventory write-downs of $8.3 million, goodwill impairment of $10.4 million, restructuring costs of $1.4 million and reversal of provision for group reorganisation $1 million”.
Murray River has been plagued by board room and operational problems over the past 12 months.
Half-year revenue rose 136 per cent to $39.4 million, due in part to two acquisitions made in 2016.
The company had $2.8 million in cash at the end of December, a big reduction from the $11 million it finished 2016 with just after listing.
“Financial performance of MRG was disappointing in the first half,” CEO George Haggar said.
“Notwithstanding the one-off costs which we have brought to book, we are particularly disappointed with the poor margins across the commodity and bulk segments.”
A corporate review has led to “important changes” being made to the supply chain.
“While the initial effort has been to focus on people, process and systems, the business will continue to move through a turnaround and consolidation phase over the coming months.”
The company says it will update its pricing models; re-vamp the post-harvest supply chain; as supply contracts come up for renewal, try to add some competitive tension to the negotiations; use the new equipment; and build a plan for local and global sales.
Murray River shares fell 3 per cent on Tuesday to 38c.