SFF predicts debt down to $150m-$180m by end of September

Silver Fern Farms expects to have reduced its debt to between $150million and $180million by the end of the September financial year, down from $289million last year.

In a recent update to suppliers, chairman Rob Hewett and chief executive Dean Hamilton said the company continued to make strong progress on its financial goals.

In the nine months to the end of June, it was ''well ahead'' of last year in terms of revenue and profit.

Net revenue was $1.9billion, compared with $1.75billion at the corresponding time last year.

The company believed it was on track for full-year earnings before interest, tax and depreciation (ebitda) in the range of $75million to $85million.

Last year, Silver Fern Farms reported a pre-tax profit of $1.8million, which followed disastrous years for the company in 2013 and 2012, with respective losses of $36.5million and $42.3million.

Gains made so far this year had been ''across the board'' and included processing improvements and tighter management of risk through matching supply and sales.

At the end of June, debt was more than $100million below the same time last year.

Silver Fern Farms was ''getting nearer'' to the end of the process of identifying potential opportunities for new investment in the company.

''This has taken longer than we had thought, in part because there has been more work involved than we originally anticipated, and secondly there has been a broader range of indicative proposals than had been expected,'' the update said.

The company was looking for outside capital to accelerate debt reduction and invest in value-added and plant improvement.

It expected to announce itsposition ''one way or another'' next month.

Earlier this month, shareholders exceeded the minimum threshold required to force a special meeting to discuss a merger with Alliance Group.

The non-binding resolution the group wanted considered was that the board be required to provide all shareholders with a full analysis of the potential benefits and risks of a merger, along with a comprehensive risk mitigation plan, which had been verified by an independent firm.

Mr Hewett and Mr Hamilton said they were in discussions with the shareholders who sought the meeting about setting a meeting date.

Silver Fern Farms recently announced it was selling its 50% share in Farm Brands Ltd to its partner Modena Investments, owned by Italian global rendering company Sapi and local management.

The joint venture was formed in 2009 to buy, produce and market meal and tallow.

Farm Brands would continue to process and market tallow for Silver Fern Farms, acquiring the previously mothballed Silverstream rendering plant, which would be recommissioned over the next six months.

The sale continued the process of simplification of Silver Fern Farms' business, which started last year with the sale of its North Island hide processing and rendering assets to Lowe Corp, Mr Hamilton said.

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