Yesterday, Silver Fern Farms announced details of its financial results which will be available today, ahead of its annual meeting in Dunedin on April 18.
The Silver Fern Farms Co-operative posted a net profit after tax of $7.8 million and an after-tax result of $5.6 million for the 15 months ended December 31, 2017.
Silver Fern Farms Ltd posted net profit after tax of $15.4 million with earnings before interest, tax, depreciation, abnormals and amortisation (ebitda) including a share of associate earnings of $50.9 million. Sales were $2.2 billion.
In a statement, chairman Rob Hewett said the accounting result for the first period of the partnership had a high level of complexity to account for the changes in company structure.
It contained some abnormal factors which would not be seen in future years.
The co-operative has moved to a December year-end, which necessitated a 15-month result for this period. From now on, there would be standard 12-month reporting periods.
The co-operative accounted for 100% ownership of Silver Fern Farms Ltd for the first two months of the result period, followed by the 50% stake by Shanghai Maling in early December 2016.
The move from 100% ownership to 50% ownership produced a non-cash accounting gain which was required to be included in the result for the period, which in part offset the seasonal losses sustained by Silver Fern Farms.
The board believed a more meaningful picture of the performance of its investment in Silver Fern Farms was represented by the most recent 12-month result.
The $15.4 million net profit after tax was after abnormal items of $10.2 million, primarily related to the closure of meat processing operations at its Fairton plant, near Ashburton, in May last year. Net profit prior to abnormals was $25.6 million.
The result for Silver Fern Farms Ltd was a material improvement on what was a particularly challenging year in 2016, Mr Hewett said.
"We are pleased to see an improved result. This was achieved on similar levels of throughput, and reflected improved in-market conditions for sheep and venison, as well as a reduction in overhead costs following plant closures and management's ongoing focus on improving efficiencies," he said.
Post balance date, Silver Fern Farms Ltd has announced an unimputed dividend of $12 million which would be split between the co-operative and Shanghai Maling.
The $6 million dividend was taxable in the hands of the co-operative and that would come back to shareholders in the form of an imputation credit.
The board had declared a $4.1 million distribution in the form of a fully imputed dividend of $3.2 million to all shareholders and a fully imputed patronage reward pool of $900,000 to shareholders who met the livestock supply criteria.
