Dairy Farmers has reported a lower net profit from continuing operations after minority interests of just $100,000 for the first half of fiscal 2007, compared to $4.7 million in the prior corresponding period.

But the result included a $7.8 million special drought distribution to its farmer members.

If Dairy Farmers had reported as a company instead of a co-operative, on a pro-forma basis, net profit for the six months to December 31, would have been $12 million compared to $9.8 million in the prior corresponding period.

Despite the drought, earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half from continuing operations rose 10 per cent to $38.5 million, as the company focused on higher-margin branded products and cut costs.

Dairy Farmers chief executive Rob Gordon said fiscal 2007 would be a year of investment in business and sales capabilities, innovation, brands and milk supply.

"While drought and additional cost pressures continue to create a challenging operating environment, I am heartened that our most recent investments in the business are enhancing our FMCG (fast-moving consumer goods) capability and creating a higher-value branded portfolio," he said.

Source: theage.com.au