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The decision followed receipt of a cash dividend of $12.4 million to the co-operative from Silver Fern Farms Ltd, which is jointly owned by Silver Fern Farms Co-operative and China’s Shanghai Maling.
That dividend was generated from Silver Fern Farms Ltd’s 2019 financial year for which it reported a net profit after tax of $70.7 million in April this year.
At the time, the dividend was deferred at the request of Silver Fern Farms Co-operative and Shanghai Maling until the outlook for the global trading environment became clearer.
In a statement yesterday, Silver Fern Farms Ltd co-chairman Rob Hewett said the operating company was in a strong position.
“While the world is still dealing with the Covid-19 pandemic, and there remain risks of disruptions to the supply chain, over the past quarter we have managed to export our food to customers who are willing to pay for safe, trusted and sustainably produced food from New Zealand.
“We were also able to fully repay the government wage subsidy at the end of May, retain our 7000 staff and provide solid farm-gate returns across most stock classes — a result we did not foresee at the start of Covid disruption.
“This strong performance alleviated the cash-flow risks to the business through our peak operational season — which was the basis for the two shareholders to request a deferral of the 2019 dividend in April,’’ Mr Hewett said.
Co-operative chairman Richard Young said the co-operative was pleased with the performance of Silver Fern Farms Ltd.
“The decision ... to defer the dividend and retain that cash within the business through this uncertain period was the right decision at the time as it gave the company greater flexibility and confidence around how it continued operations through Covid-19 restrictions.’’
The co-operative would receive a cash dividend of $12.4 million. That dividend payment translated to the Co-operative’s half share of a total dividend payment of 37.5% of Silver Fern Farms Ltd’s net profit after tax.
The co-operative has retained $4.5 million, to build cash reserves, and has declared a dividend and patronage reward for shareholders totalling $7.9 million, fully imputed.
All ordinary and rebate shareholders at the record date of July 31, 2020, will receive a fully imputed dividend of 5.4c per share.