New Zealand's Fonterra, the world's largest dairy cooperative, posted its first-ever annual loss Thursday, admitting it had let farmers down with over-optimistic financial forecasts.
Fonterra's interim chief executive Miles Hurrell launched a review of the business after unveiling a NZ$196 million ($129 million) loss, compared with a NZ$745 million profit in the previous year.
"There's no two ways about it, these results don't meet the standards we need to live up to," he said in a statement.
"In FY18, we did not meet the promises we made to farmers and unitholders."
Fonterra is a collective that buys milk and dairy products from New Zealand farmers and then sells it on to foreign firms.
It means that the bottom line can be squeezed even when dairy prices are strong because it is paying farmers more for the raw product.
Chairman John Monaghan said the dairy giant's forecasting was off track when it announced half-year results in March.
"There's no doubt that at the half year we stood in front of our farmers and made some commitments and we haven't met them," he said.
It has been a tumultuous year for Fonterra, with the departure of former chairman John Wilson and former chief executive Theo Spierings amid grumblings about poor performance.
It wrote down a stake in Chinese infant formula producer Beingmate by NZ$439 million and had to pay France's Danone a NZ$232-million settlement over a 2013 baby formula contamination scare.
Sales revenue for the year was up six percent at NZ$20.4 billion, while earnings were down 22 percent at NZ$902 million.
Fonterra said it was reviewing all its businesses, including the ongoing stake in Beingmate, with a view to lifting performance.
It also promised greater "financial discipline" and more accurate forecasting.
The cooperative said milk prices should remain steady at NZ$6.75 per kilogramme of milk solids in the current financial year.
Shares in the Fonterra Shareholders Fund, the listed part of the business, were down 1.01 percent at NZ$4.92 in early trading in Wellington.