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

 

Weaker performance offset by robust NZ ag sector

Wrightson says weaker performance in Australia, South America, offset by robust NZ ag sector

By Tina Morrison

June 15 (BusinessDesk) - PGG Wrightson reaffirmed its forecast for annual earnings, saying weaker performance from its Australian and South American businesses would be offset by better trading in New Zealand.

Operating earnings before interest, tax, depreciation and amortisation is expected to be between $65 million to $70 million in the year ending June 30, up from $64.5 million last year and in line with its February forecast, the Christchurch-based company said today.

"Overall, the agricultural sector in New Zealand remains robust and is having a profitable year with solid production and good prices," chief executive Ian Glasson said in a statement. "PGW’s Australian and South American businesses have faced tough conditions, with both regions being too dry to meet their sales targets. Despite these headwinds we continue to expect an increase in overall operating ebitda for PGW this year, with PGW sharing in the broader prosperity in the NZ agriculture sector, highlighting the resilience of its diversified business model.”

In February, the company said 2018 net profit would be about 20 percent lower than last year's $46.3 million, due to one-time gains from property sales in 2017. Today, Glasson said net profit after tax from normal trading was forecast to be about 25 percent lower, reflecting the lack of significant property sales which added $8.7 million to earnings last year, an expected loss on currency hedges, and costs associated with potential Holidays Act remediation.

“The recent dip in the value of the New Zealand dollar means our export currency hedges are likely to mark-to-market as an unrealised loss,” Glasson said. “There are also non-trading items outside operating ebitda that have the potential to impact reported npat in FY2018. For example, as is the case with many large NZ employers, PGW is continuing to work through a process to quantify the cost of historical liabilities under the Holidays Act 2003."

Glasson said the recent Mycoplasma bovis outbreak in New Zealand is having little effect on the company's financial performance to date, and it is working closely with its customers to monitor the impact on the broader sector.

In October, Wrightson hired Credit Suisse (Australia) and First NZ Capital to run a strategic review of the business, looking at the firm's capital structure and shareholding structure and identifying the best route to pursue growth. Today, Glasson said the review was "progressing well" and the company hopes to comment further on outcomes from this work later in the year.

Its shares last traded at 70 cents, having increased 23 percent over the past year.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Te Kuha: Govt Declines Application To Mine Conservation Land

An application to mine coal on public conservation land near Te Kuha in the Buller District has been declined, Minister of Conservation Eugenie Sage and Minister of Energy Resources Megan Woods announced today. More>>

ALSO:

Fieldays: Deer Milk Wins Innovation Award

Pāmu’s (formerly Landcorp) focus on innovation in the food business has been recognised at the 50th Fieldays, winning the Innovation Grassroots awards, with its ground-breaking deer milk product. More>>

ALSO:

Milking It: Regulator Concerned At Fonterra's Price Calculations

The Commerce Commission says it is concerned that the 'asset beta' Fonterra Cooperative Group uses to determine the farmgate milk price is too low, meaning it ends up paying its farmers a higher price for their milk than would be warranted under the company's enabling law. More>>

ALSO:

Antarctica: Waves Trigger Ice Shelf Collapse

Ocean waves following sea ice loss trigger Antarctic ice shelf collapse Storm-driven ocean swells have triggered the catastrophic disintegration of Antarctic ice shelves in recent decades, according to new research published in Nature. More>>

ALSO:

Housing: National Affordability Worsens

The major change that can be seen in the most recent data is worsening affordability for first-home buyers at that national level, driven by higher house prices in Auckland, Wellington, Christchurch, Hamilton and Tauranga. More>>

ALSO:

Avocados Are Toast: Prices Smash Records

Avocado prices rose 37 percent in May to record levels after a small harvest, Stats NZ said today. However, prices fell for other fruit and vegetables, such as mandarins and broccoli. More>>

ALSO: