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

 

PGG Wrightson lifts annual earnings outlook

PGG Wrightson lifts annual earnings outlook for a second time, warns of weak farmer confidence

By Suze Metherell


June 12 (BusinessDesk) - PGG Wrightson, the rural services firm controlled by China's Agria Corp, lifted its annual earnings outlook as second-half trading comes in ahead of expectations, but warned weak farmer confidence may weigh on future sales.

The Christchurch-based company expects annual operating earnings before interest, tax, depreciation and amortisation to be between $66 million and $69 million in the year ending June 30, above the February forecast for earnings between $62 million and $68 million. That in itself was an upgrade from previous guidance to beat last year's earnings of $58.7 million.

Wrightson is trading ahead of expectations, with strong seed sales across New Zealand and Australia, despite "challenging conditions" in the domestic market, it said in a statement. Still, dairy prices have dropped, hitting New Zealand largest export commodity and denting farmer confidence, while a dry summer had also been felt in some regions.


"The improving PGW results we are seeing are a direct result of the hard work we’ve put into our business over recent years,” chief executive Mark Dewdney said. "Looking ahead, reduced farmer confidence in dairy and lamb is creating more uncertainty than usual regarding spending intentions for next season. This may result in farmers reducing expenditure which will potentially impact our financial performance."

The Reserve Bank yesterday cut interest rates as falling dairy prices dragged down the nation's terms of trade more expected, and has previously cited the sector as a key risk to the nation's financial stability given the industry's concentration of high indebtedness.


In February Wrightson reported a 47 percent gain in first-half profit to $19.7 million in the six months ended Dec. 30, beating analysts' expectations. Operating Ebitda climbed 51 percent to $33.6 million and revenue from continuing operation increased 3.1 percent to $654.7 million.

Agria first invested in Wrightson in 2009 when the company was forced to raise new equity to repay bank debt during the global financial crisis, after Wrightson's funding lines dried up and scuttled a bid to merge with Silver Fern Farms a year earlier.


Wrightson shares rose 2.2 percent to 46.5 cents and have fallen 1.1 percent since the start of the year.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Reserve Bank: Official Cash Rate Unchanged At 1 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment remains around its maximum sustainable level while inflation remains below the 2 percent target mid-point but within our target range... More>>

ALSO:

Food Prices: Avocados At Lowest Price In Almost Three Years

Avocados are at their cheapest average price since February 2017, with tomato, lettuce, and cucumber prices also falling, Stats NZ said today. More>>

Auckland Port Move: Cabinet Ministers Deliberate On Report

Cabinet ministers now have a copy of a report urging the government to move the Auckland port up north, but say no final decisions have been made. More>>

ALSO:

Toxicology Tests Planned: Dead Rats Washed Up On Beaches

As many as 600 rats washed up on Westport's North Beach over the weekend to the horror of locals. DOC said they may have been killed by a recent 1080 poison drop 140km away and washed down the Buller River after heavy rain battered the coast. More>>

ALSO: