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

 


Landcorp posts 133% gain in full-year operating profit

Landcorp posts 133% gain in full-year operating profit as dairy sales surge

By Jonathan Underhill

Aug. 26 (BusinessDesk) - Landcorp posted a 133 percent increase in full-year operating profit as New Zealand's biggest corporate farmer benefited from a surge in dairy prices that won't be sustained in the current year, allowing it to lift its dividend payment by 40 percent.

Operating profit was $30 million in the 12 months ended June 30, from $13 million a year earlier, the Auckland-based company said in a statement. Sales climbed 37 percent to $241.7 million, including a 70 percent gain in milk revenue to $129 million. Net profit soared 402 percent to $54.7 million, reflecting changes in the value of financial instruments and livestock.

Last week, state-owned Landcorp said operating profit would fall to a range of $8 million to $12 million in 2015, missing the $20.5 million forecast in its statement of corporate intent, reflecting the slide in global dairy prices this year from their February peak, which prompted Fonterra Cooperative Group to slash its forecast farmgate milk price to $6 per kilogram of milk solids from $7/kgMS.

"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," chief executive Steven Carden said in a statement. "We're very focused on initiatives to raise productivity and efficiency across our operations."

Costs rose 15 percent to $207 million in the year, reflecting the start of its share-milking agreement with Shanghai Pengxin Group, which acquired the Crafar farm, and the expansion of its dairy conversion programme in the Waikato.

Landcorp will pay the government a $7 million dividend, up from $5 million a year earlier. Its total shareholder return was $115.9 million in the latest year, from a loss on that basis of $1.5 million in the previous year. The turnaround mainly reflected a $36.7 million gain on the value of livestock and a $67.6 million revaluation gain on land and improvements, it said.

Carden said that in the medium and long term, Landcorp "will be taking significant steps to reduce our exposure to commodity price cycles." It aims to do that by widening the range of livestock farmed and increasing its focus on red meat production of lamb, beef and venison.

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

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news