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

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news