State-owned farming company Landcorp will pay a record dividend of $27.5 million after recording one of its most profitable years.
The dividend was up from $18 million in the previous year, while net operating profit before tax was $42.2 million, compared with $10 million for the previous corresponding period.
The substantial increase in profit came mainly from strong revenue growth in dairying and livestock operations, chief executive Chris Kelly said.
Wool and forestry production also made significant contributions to overall revenue growth of 28.6%, with the company's total operating income rising to $218.5 million, while total operating expenses increased 11.7%.
Landcorp had a very positive outlook and, while growth in parts of the global economy remained weak, it still foresaw underlying growth in demand for New Zealand food and fibre, Mr Kelly said.
The company was committed to structural change in the country's agricultural-based industries to increase profitability for producers and processors.
Landcorp's involvement with the red meat industry entity Farm IQ Systems Ltd included substantial investment alongside the Government and Silver Fern Farms, Mr Kelly said.
It was a bold initiative to effect a step change in the nation's production and marketing of red meat, with greater input of knowledge and technology on farms and greater connection to end markets.
Landcorp foresaw the Farm IQ model as being "transformational" in its sheep, beef and deer operations in the long term.
The wool industry also needed major change and Landcorp remained committed to transformation in that industry, he said.
In broad terms, the "Fonterra model" was working for New Zealand. It had promoted efficiencies which would lead to greater returns over time.
Red meat and wool could benefit from the same type of strategic focus, providing gains for all producers and processors, he said.
