Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Landcorp Farming doubles profit

26 August 2014

MEDIA RELEASE

Landcorp Farming doubles profit

Landcorp Farming has recorded a net operating profit of $30 million for the year ended 30 June 2014, up from $13 million from the previous year. Total revenue from operating activities increased 37% to $241.7 million.

The growth in revenue reflected a recovery in prices as favourable weather boosted production volumes for Dairy, Sheep and Beef products. Landcorp’s expansion of dairy production across the country combined with record milk solid prices contributed to the strong performance.

Landcorp CEO, Steven Carden, said various business decisions taken in 2013/14 meant Landcorp could approach the coming year with confidence, despite the prospect of lower prices.

“We’re very focussed on initiatives to raise productivity and efficiency across our operations.

“We have strengthened our productive capacity and secured economies of scale through new partnerships with landowners like the Hauraki Collective, introducing a state of the art Farm Management software system, and a company-wide initiative to reduce costs and streamline decision-making at the farm level”.

“We’ve also made solid gains in feed production per hectare and have achieved a 10% lift in dairy production” he said.

Landcorp’s total shareholder return (or comprehensive income) was $115.9 million compared with a $1.5 million loss the previous year. The increase was mainly due to a $36.7 million unrealised gain in the market value of livestock and a $67.6 million revaluation gain on land and improvements.

High dairy prices and success with partnerships for expanded production increased milk revenue by 70% to $129 million.

Expenses for 2013/14 increased 15% to $207 million due to the commencement of the sharemilking arrangement with the Shanghai Pengxin Group and expansion of the Wairakei Pastoral Dairy conversion program. Purchased feed also increased as Landcorp increased production to exploit high forecast milk prices and to offset the effect of the dry conditions experienced in the North Island in early autumn

Mr Carden said, despite the bottom-line impact of the projected fall in milk prices for 2014/15, Landcorp was well placed to continue to record sustainable profit growth over the medium term.

“In addition to our productivity improvements, we have a strategy focused on significantly improving our environmental footprint and driving a big lift in the calibre of our people and their safety on-farm.

“In the medium and long term, we will be taking significant steps to reduce our exposure to commodity price cycles. In part, that means maintaining a diverse portfolio of species farmed - including a renewed emphasis on expanding our red meat production in our lamb, beef and venison categories. This will involve collaborating with other farming groups, such as iwi, interested in joining our contracts or establishing new ones with us.

“We also plan to ensure our products are targeted at niche markets where we can have a direct relationship with the customer,” he said.

Landcorp will pay the shareholder an increased dividend of $7 million for 2013/14. Debt has been reduced by $56 million to $172 million over the course of the year, following the sale of various farms in the North Island.

Landcorp 2013/14 financial results

12 months to
30 June 2014
12 months to
30 June 2013
Percentage change
Amount (millions)Amount (millions)
Revenue from ordinary activities
$NZ 241.7

$NZ 176.7
37%
Net operating profit
$NZ 30.0[1]

$NZ 13.0
133%

Net profit (loss) (after tax)

$NZ 54.7[2]

($NZ 18.1)
402%

Total comprehensive income

$NZ 115.9

($NZ 1.5)
7,827%

Final Dividend (declared)

$NZ 7.0

$NZ 5.0

40%

About Landcorp Farming
Landcorp is a state owned enterprise and New Zealand’s largest corporate farmer. It owns or manages 137 dairy, beef, sheep and deer farms from the Far North to Southland. With 1.6 million stock units on 376,942 Ha, it produces around 18,000 tonnes of milk solids, 10,000 tonnes of sheep meat, 10,000 tonnes of beef, 3,500 tonnes of wool, 2,500 tonnes of venison and 8 tonnes of velvet per annum.

Ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>

BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>


BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Housing: More House Price Gains Expected

House price expectations remain high, with a net 56% of respondents expecting house prices will increase. Fears of higher interest rates are fading, consistent with the RBNZ’s signals this year. Affordability and a lack of houses for ... More>>

TDDA: State-Of-The-Art Drug Testing Laboratory To Open In Auckland

World leading drug testing agencies, The Drug Detection Agency (TDDA) and Omega Laboratories, open New Zealand laboratory More>>

Network: Bigpipe Launches Ultra-Fast Broadband Into Wellington

Bigpipe Launches Ultra-Fast Broadband into Wellington Naked broadband provider Bigpipe has extended its national reach, announcing today, the launch of its unlimited UFB offering into Wellington. The Spark Venture business is giving Wellingtonians the ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news