New Zealand Farming Systems Uruguay is expected today to deliver its forecast after-tax profit of $1.5 million for the year, but that is before it pays an up to $16 million performance fee to shareholder and manager PGG Wrightson.
NZSFU, one of only two dairy-related investment platforms open to the public, was established in 2006 by rural servicing company PGG Wrightson and raised $105 million by December 2006 as an unlisted company plus a further $39 million from institutional investors in April 2007.
When it listed in December 2007, it raised a further oversubscribed $110 million - bringing the total to $254 million - with listed PGG Wrightson holding a 20% share.
The performance fee to PGGW may be up to $16 million, and after accounting deductions and additions, NZSFU would be in a $5 million deficit.
The PGG Wrightson fee was 1.5% of the asset value, but in June went to 1% for this financial year.
The company, which has spent $US94.4 million on 36,300ha of Uruguayan land and running 4300 cows, has not ruled out acquiring further South American holdings.
The company has focused its development in South America as land can be purchased and converted for 20% to 25% of the cost of New Zealand dairy farms.
To date, its payout rate per kg of milk solids has mirrored that of Fonterra, around $6.90.
