Murray Goulburn Co-operative Co Ltd, Australia's biggest dairy producer, said its managing director quit on Wednesday as it blamed weaker-than-expected China sales for a profit warning.

The earnings downgrade from Australia's biggest exporter of processed foods underscores the risk companies take by leaving themselves exposed to changes in Chinese consumer demand and unfavorable moves in foreign exchange rates.

Just nine months after listing, the maker of Devondale milk and butter slashed its full-year net profit forecast to between A$39 million ($30.2 million) and A$42 million, less than half the figure it forecast in an IPO prospectus.

In a statement to the Australian Securities Exchange, the company said managing director Gary Helou will step down. It said Helou and the board agreed the company "will be best served under fresh leadership."

"We are very disappointed to be announcing this downgrade," said David Mallinson, executive general managing of business operations, who is stepping in as acting chief executive officer, on an analyst webcast.

Murray Goulburn said that after sales of its milk powder in China tripled in the second half of 2015, it increased production only to see orders drop over Chinese New Year in February.

Sales to China recovered in March but slowed again in April. The company offered no explanation but said the slowdown "has significantly reduced expectations for the remainder of the financial year."

Reuters