Allied Farmers unsure about the year ahead with weak first-quarter livestock sales
By Sophie Boot
Nov. 2 (BusinessDesk) - Allied Farmers' first-quarter livestock earnings fell, although the rural services firm says it's too early to say whether it will recover by the end of the current half or the financial year.
Earnings in the three months ended Sept. 30 were below the same period a year earlier "largely due to the impact of the wetter spring weather, which has generally had the impact of reducing livestock sales in this quarter," the Hawera-based company said in a statement. Allied Farmers had previously predicted "careful growth" in the livestock business, tempered with a flat outlook for the meat processing business as overseas prices remain low.
"It is too early to say whether this slower start to livestock trading will be recovered later in either the remaining months of the half year to 31 December 2017, or possibly in the second six months of the financial year to 30 June, when livestock sales are traditionally higher," chair Garry Bluett said. "Livestock prices are holding up well, and ALF considers that improving farming/weather conditions, appreciable numbers of farms going to market, and NZ Farmers Livestock’s progress building teams and market share over recent years should improve this position."
In 2017, Allied reported a 60 percent lift in net profit to $2.2 million on an improved result from its livestock division, particularly in the second half, and cost reduction. During the year, its livestock division established a financing unit, initially focused on financing service bulls but then expanding into other livestock financing.
Allied Farmers shares last traded at 9.2 cents and are up 26 percent this year.