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

 


Rural Equities doubles annual profit

Rural Equities doubles annual profit on record milk production and prices

By Suze Metherell

Sept. 3 (BusinessDesk) - Rural Equities, the farming group controlled by the Cushing family, doubled annual profit and lifted its dividend 17 percent on the back of record dairy production and prices.

Profit rose to $24 million in the 12 months ended June 30, up from $10.9 million a year earlier, the Hastings-based company said in a statement. Operating earnings before interest and tax doubled to $6.43 million from $3.33 million, as its six dairy farms produced a record 1.67 million kilograms of milk solids and the price of dairy products soared.

Production at its three Waikato farms benefited from rising beef, lamb and wool prices, and "contributed materially to increased earnings," the company said.

"The near doubling in operating Ebit, due to productivity gains and strong agricultural commodity prices, was pleasing," said executive chairman David Cushing. "Revaluation gains of approximately $20 million increased total assets to in excess of $220 million."

Valuation of Rural Equities' 25 farms and other assets increased by $19.9 million, compared with a gain of $7.2 million a year earlier. Debt represented 12 percent of its total assets, the company said.

Rural Equities will pay a dividend of 7 cents per share on Oct. 8, up from 6 cents a year earlier. Shares of the company, which trade on the unregistered Unlisted market, rose 3.5 percent to $4.40, giving it a market capitalisation of $157.7 million.

Dairy prices soared in 2013, but an increase in supply has seen prices slump 45 percent since February in Fonterra Cooperative Group's GlobalDairyTrade auctions. Fonterra, the world's largest dairy exporter, has cut its forecast farmgate milk payout for 2015 to $6 a kilogram of milk solids, from an initial $7/kgMS, saying a build-up of inventory in China had cooled demand and weighed on dairy prices.

Rural Equities said it is anticipating lower milk prices in the coming year, but expects stronger beef and sheep meat prices. Directors noted the "overvalued New Zealand dollar appears to be trending downwards to more appropriate levels."

During the past the year, the diversified farming investor acquired a 12.7 percent stake in Australian agricultural company Tandou, which has a portfolio of high security and general security water rights and agricultural land, without putting a dollar figure on the purchase. It also settled the sale of its Blairmore sheep, beef and deer grazing farm in Central Otago to a neighbouring farmer for $3.45 million, or about 7 percent above its June 2012 valuation.

Since balance date the company has begun a $5.1 million conversion of its Ashburton Eiffelton property, which will see 233 hectares of its 396 hectare block converted to a 940 cow dairy farm, with the remaining land to be used for winter grazing and supplementary feed.


(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Commerce: Supermarket Inquiry Finds No Breaches By Countdown

The Commerce Commission inquiry into anti-competitive behaviour by Countdown supermarkets, alleged by former Labour Party MP Shane Jones, has found nothing to warrant prosecution, although it warns supermarkets to take care in the way they communicate... More>>

ALSO:

Crown Accounts: English Flags ‘Challenge’ To Budget Surplus

Finance Minister Bill English is warning next month’s half yearly fiscal and economic update from the Treasury may not forecast a budget surplus, saying that returning the government’s accounts to surplus in 2015 will be “a challenge”, given the decline in commodity prices and weak global inflation. More>>

ALSO:

March 2015: Netflix To Launch In Australia And New Zealand

World’s Leading Internet Television Network to Offer Original Series, Movies, Documentaries, Stand-Up Comedy Specials and TV Shows for Low Monthly Price More>>

ALSO:

Price Of Cheese (Is Up): Dairy Product Prices Fall To Five-Year Low

Dairy product prices fell in the latest GlobalDairyTrade auction to the lowest level in more than five years, led by declines in rennet casein and skim milk powder. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news