Fertiliser is applied to Landcorp's Waitepeka farm in South
Otago. Photo by ODT.
State-owned Landcorp Farming has more than doubled its
profit for the June year, with dairy production expansion
contributing to the strong result.
The country's largest corporate farming operation has posted
a net operating profit of $30 million, up from $13 million
the previous year, and will pay the Government a $7 million
dividend, a $2 million increase on last year.
Total revenue from operating activities increased 37% from
$176.7 million to $241.7 million, while high dairy prices and
expanded production increased milk revenue by 70% to $129
Earlier this month, Landcorp slashed its profit forecast for
the year to June 2015 from $20.5 million to between $8
million and $12 million, reflecting the drop in Fonterra's
forecast milk price to $6.
The company produces about 18,000 tonnes of milk solids a
In a statement yesterday, chief executive Steven Carden said
various business decisions taken in 2013-14 meant the company
could approach the coming year with confidence, despite the
prospect of lower prices.
The company was focused on initiatives to raise productivity
and efficiency across its operations.
It had strengthened its productive capacity and secured
economies of scale through new partnerships with landowners,
introduced a new farm management software system, and a
companywide initiative to reduce to reduce costs and
streamline decision-making at the farm level.
It had also made solid gains in feed production per hectare
and had achieved a 10% lift in dairy production, Mr Carden
Despite the bottom-line impact of the projected fall in milk
prices to 2014-15, the company was ''well placed'' to
continue to record sustainable profit growth over the medium
In the medium and long-term, Landcorp would be ''taking
significant steps'' to reduce its exposure to commodity price
That meant maintaining a diverse portfolio of species farmed,
including a renewed emphasis on expanding red meat
production, which would involve collaborating with other
The company planned to ensure its products were targeted at
niche markets where it could have a direct relationship with
the customer, he said.