PGG Wrightson has posted its best first-half operating ebitda result in a decade.
Operating earnings before interest, tax, depreciation and amortisation of $34.2 million for the half year ending December 31 were up $8.2 million on the previous corresponding period.
Net profit after tax was $14.6 million, $0.4 million lower than the same period last year.
PGW chairman Alan Lai expected that strength to continue, with operating ebitda set to exceed 2017's result and be in a $65 million to $70 million range.
Previously it was expected that net profit after tax for FY2018 would be about 30% lower than FY2017 due to a reduction in gains on property sales given the divestment programme was now largely complete. It was now expected net profit after tax would be about 20% lower.
PGW's board declared an interim dividend of 1.75c per share which would be fully imputed and paid to shareholders on April 5.
PGW chief executive Ian Glasson said the livestock business benefited from strong international demand for protein and reduced tallies which combined to push up livestock prices across New Zealand.
The retail and water group ''performed superbly'', with a 25% increase in operating ebitda over the same period last year.
The water business continued to be challenged by the lack of on-farm development. Despite that, the business was seeing some opportunities come to fruition, including successful tendering to supply irrigation to the Royal Auckland and Grange Golf Club, and Millbrook developments.
The New Zealand seed and grain business had a strong result due to favourable weather conditions in spring. However, a reduction in spring sales increased closing inventory levels in both the Australian and South American businesses.
The company entered the second half of the financial year with confidence, remaining optimistic that the positive trading environment would continue, Mr Glasson said.
''But as always, across all markets, we wait to see what autumn conditions will bring and how these will impact our business,'' he said.
A report from Forsyth Barr said it was an ''impressive'' first-half result. Pricing strength, product mix benefits and timing of sales appeared to be integral to the strong result.
