MILK MINUTE
Financial Strength Allows for Connections and Innovation JOSEP BARENYS, MMPA CHIEF FINANCIAL OFFICER
A
fter the conclusion of the 2019 fiscal year, MMPA remains in a strong financial position. Our financial performance indicators suggest that MMPA has a strong balance sheet and that we are over and above the expectations set for us by our financial institutions. Based on the trends we have seen in recent years monitoring these indicators, we are looking forward to an even stronger financial year to come, allowing MMPA to continue pursuing partnerships and remaining on the frontier of dairy innovation. MMPA’s strong financial position, key financial indicators and other financial details regarding fiscal year 2019 will be relayed in the annual report released in February. However, a synthesized view can be analyzed using two main performance indicators that our financial partners use to track our financial standing: working capital and net worth. JOSEP BARENYS, MMPA CHIEF FINANCIAL OFFICER
Our working capital is the difference between our current assets and current liabilities, taking into account the current effective cash flow of the organization at one point in time. MMPA has continued to exceed the expectations of our financial entities. In 2018, this strength allowed us to use our resources to finance Constantine’s expansion and drive innovation that has since resulted in numerous partnerships. This funding method allowed us to not have to ask for money from our membership in the midst of the expansion, but rather have the expansion operational at the time our memberowners began investing in the project, providing an overall benefit for our members. We understand that it has been a challenging economic environment for our members. Exceeding our financial institutions’ expectations for working capital has also allowed us to provide additional cash to our members on the advanced payment for their milk on a monthly basis. The extra amount of cash flow helps us better manage the advanced price our members receive allowing them to financially manage their own operations during periods of depressed milk prices. MMPA is also delivering in net worth, our overall value in the marketplace. The strength of this financial indicator helps us to manage our relationships with financial entities and allows us to successfully manage the organization. Our net worth is evidence of MMPA’s work in staying relevant in the market through building connections and continuing to innovate. When taking a step back and analyzing the market that we compete in, MMPA continues to perform above many of its peers in a variety of financial indicators. This analysis suggests that we are in a strong financial position within the marketplace at this point in time. In conclusion, 2019 was a year of significant financial improvements for MMPA. We are pleased to report this, given recent news from others in the marketplace experiencing financial uncertainty. Thanks to the strength of our balance sheet, we were able to advance more money to our members, refinance our debt and improve our overall financial situation. These results directly affect our members’ bottom lines, which is why the team at MMPA takes their efforts so seriously. We continuously manage costs and review it from a financial point of view to provide the greatest advantage to our members.
6
milk messenger / JAN-FEB 2020
