Widespread drought means Landcorp is unlikely to report an operating profit for the full year, despite recording a $2.5 million profit for the half-year to December.
The state-owned farming company's first-half net operating profit was down from $11 million in the first half of 2011-12, a period of much higher product prices and excellent climatic conditions.
Revenues were down due to softer farm product prices but production increase, operating expenses were tightly controlled and major developments remained on track, the company said.
A full-year operating result of between $6 million and $8 million had been expected prior to the drought. It was now unlikely the company would pay a full-year dividend.
Total revenues for the half-year were down 7.4% to $95.4 million, reflecting the general easing in dairy, meat and wool prices. Milk revenue fell 10.7% to $47.3 million, despite production growth, while livestock revenue was down 5.3% to $43.8 million. Wool, forestry and other revenues also eased.
Lamb production was affected by spring snow in parts of Otago and Southland. Overall, the South Island lambing rate fell to 131% and production was almost 15,000 lambs fewer than budgeted for the half-year.
In contrast, North Island lambing rose to 145%, with 10 properties exceeding 150%.
The first half of 2012-13 saw further steps taken on major Landcorp developments in dairying and in export lamb production and supply.
The partnership with Shanghai Pengxin of China for the development and operation of the 16 former Crafar farms began operating after Shanghai Pengxin completed its purchase of the properties at the end of November.
Landcorp had now invested about $21.4 million in livestock for the farms in the central North Island and Manawatu. The next stage of development was also well under way on the Wairakei Estate dairying complex near Taupo, with further areas of forestry being cleared for conversion to pasture.
Landcorp expected its export lamb supply to Tesco in the UK, in conjunction with Silver Fern Farms, would be up 20% in the present year. Since early December, the company had supplied 5000 lambs to specification each week for the Tesco contract and that would continue until mid-May.
