Landcorp profit fall expected

State-owned Landcorp Farming is reviewing its full-year profit forecast, after its half-year profit was slashed by $11.2 million compared to the previous year.

The country's largest corporate farming operation posted operating revenue of $109.8 million for the six months to December 31, down from $119.4 million for the corresponding period in 2013, and a net operating profit of $1 million, down from $12.2 million.

Net profit after tax was $62.7 million, down from $109.3 million.

The profit after tax includes significant revaluation gains and losses, mainly arising from the changes on values to livestock held for breeding and/or production.

The first six months had been ''challenging'' and Landcorp was reviewing its full-year profit forecast of between $1 million and $6 million, chief executive Steven Carden said in a statement.

Last year, Landcorp had posted a full-year net operating profit of $30 million, and paid the Government a $7 million dividend.

The company's six-year result would come as no surprise given the low price for milk solids and the challenges of long periods without rain. However, the impact of those had been ''cushioned'' by anticipating them early, Mr Carden said.

''One example is our support of the Fonterra guaranteed milk price scheme and another is our proactive livestock management around the country ahead of the drought,'' he said.

Landcorp produced about 18,000 tonnes of milk solids and the fall in milk prices had significantly impacted on its revenue, although it remained on track for a ''modest profit'', he said.

New dairy units had opened in Taupo and the company had achieved its second-highest lambing percentage in its North Island livestock business.

Flourishing in a ''highly volatile world'' meant maintaining a diverse portfolio of other species farmed.

Landcorp planned to refocus its traditional beef, lamb and venison products around particular customers and was trialling new higher-value sales opportunities in sheep milk, deer leather and manuka honey.

''Across all our products we're after customers in niche markets with specific requirements,'' Mr Carden said.

The company had also taken ''significant steps'' to improve the marketing of its products, including a partnership with New Zealand Merino to market Landcorp's entire coarse wool clip.

 

 


Landcorp

 

• A state-owned enterprise.

• New Zealand's largest farming company.

• Owns or manages 137 dairy, beef, sheep and deer farms from the Far North to Southland.

• Produces about 18,000 tonnes of milk solids, 10,000 tonnes of sheep meat, 10,000 tonnes of beef, 3500 tonnes of wool, 2500 tonnes of venison and eight tonnes of velvet.


 

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