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Silver Fern Farms Responds To Dynamic Global Trading Environment With Strong Performance

Silver Fern Farms Co-operative has reported a net profit after tax of $32.4m for the 2020 financial year. Its investment, Silver Fern Farms Limited, reported a net profit after tax of $65.4m in the same period.

Silver Fern Farms Co-operative Chairman Richard Young said the financial result achieved by the Co-operative and Silver Fern Farms Limited for the 2020 year is a strong result built off the skill and expertise of its people who navigated the company through a period of considerable uncertainty.

“The performance of the operating company in 2020 was truly commendable across a range of areas. Most important was how they put the health and welfare of their people first. In doing so they set a platform of trust and shared commitment from their staff to stand up as essential workers to service our regional communities, and to service our global consumers.”

“Silver Fern Farms Limited’s result for 2020 follows closely behind their previous year’s performance which was the strongest financial result in the past decade. It is a special achievement given the wide range of constraints the company was under throughout the year.”

“Financially the returns Silver Fern Farms Limited achieved from the market provides stability for both the operating company and the Co-operative.”

“At balance date, 31 December 2020, we remained free of debt, and had cash on hand of $22.3m, and Total Shareholder Equity of $327.4m. This is important to us as we continue to face into an environment of global uncertainty.”

“We are pleased to be in a strong financial position where we are able to continue to provide returns to our shareholders.”

The Co-operative has declared a distribution of $8.1m in Dividends and Patronage Reward, marking the fourth consecutive year of distributions.

Eligible shareholders, on the record date of 16 April 2021, will receive a 100% imputed dividend of 5.5 cents per share payable to all ordinary and rebate shareholders.

A 100% imputed Patronage Reward of 5.7 cents per share will be paid on qualifying shares to supplying shareholders based on supply during 2020 as measured on 31 December 2020.

The payment date for both distributions is 28 April 2021.

“At the heart of any co-operative is the realisation that individuals understand the need and the advantage of pulling together for their mutual benefit, and the benefit of their wider community.

“The 2020 financial year certainly demonstrated how important it was to embrace this co-operative spirit.

“Over the past year, there has been a heightened awareness of the compelling value our Shareholder Benefits Programme delivers to our suppliers.

“2020 presented challenges across our own farming businesses, together with a strong operating company and co-operative we are well positioned to navigate future challenges and opportunities for mutual benefit”

Silver Fern Farms Limited delivers $65.4m net profit after tax – the second strongest result of the past decade

Silver Fern Farms Limited’s Chief Executive Simon Limmer said Silver Fern Farms Limited’s financial performance in 2020 showed the company’s growing resilience and sustainability of returns.

“We have never gone this long without meeting face to face with our global customers and stakeholders, and that possibility is still some time away. Despite all that disruption, we have witnessed character and resilience throughout our Silver Fern Farms community, from on-farm right through to our partners in market. The way we worked as a team, continuously finding solutions and looking out for each other was key to our performance in 2020.

For the 12 months to 31 December 2020 it achieved a net profit after tax of $65.4m (FY2019: $70.7m) and a net profit before tax of $90.2m (FY2019: $89.6m).

Silver Fern Farms Limited achieved sales of $2.5b and earnings before interest, tax, depreciation and amortisation (EBITDA) including share of associate earnings of $125.7m (FY 2019: $124.3m).

Silver Fern Farms Limited directors have declared a 100% imputed dividend of $26.2m (FY2019 $26.5m partly imputed) payable to its two 50% shareholders Shanghai Maling Aquarius Ltd and Silver Fern Farms Co-operative Limited.

Total shareholder equity at 31 December 2020 is $609.5m, up from $571.0m at 31 December 2019.

“This financial result is very pleasing in the context of a year of disruption and complexity, and to back up the strong 2019 performance. It was delivered through a remarkably dynamic and unprecedented trading environment. We executed our opportunities well – through our operational management of the business and in the market, operating as an essential service to our farmer suppliers and those in need of food globally,” Mr Limmer said.

“We are now showing four years of sustained profitability. This is the level of financial performance required to provide an appropriate return on investment to our shareholders and enables us to continue investing in infrastructure, systems and the capabilities necessary to execute our market focused strategy.

“Keeping our people safe and employed under the Covid-19 environment was paramount to us. We know we have an important part to play in New Zealand’s recovery and we demonstrated that through how we cared for our people as they carried out their role as essential service providers for our farmer suppliers.

“Our financial performance lays the foundation for our optimism and fuels our ability to deliver on our commitment to our strategy and vision of being the world’s most sustainable grass-fed red meat company.

“Silver Fern Farms operates 14 food production sites in regions across New Zealand. We support jobs in a variety of communities from Dargaville in the far-North, where we are a leading employer, to larger centres like Hastings and Christchurch, through to smaller communities in the South like Hokitika, and Gore.

“Our national contribution is significant, but equally important is the business we generate for small and medium sized goods and services companies in the communities where we work, and the returns back to farmers from the value we generate in-market for our food.

“Silver Fern Farms proved it was robust enough to withstand the global disruption caused by Covid-19. We have the financial stability to execute our market-focused Plate to Pasture strategy. It has enabled us to develop our people, support our farmer suppliers and our communities, and feed New Zealanders and the world with sustainable, naturally delicious red meat.”

The Annual Report of the Co-operative will be available on Wednesday 14 April 2021, ahead of the Co-operative’s Annual Meeting which will be held in Dunedin and via livestream on Thursday 29 April 2021.

Key financial metrics FY 2020Silver Fern Farms Ltd.Silver Fern Farms Co-operative Ltd.
Net Profit Before Tax$90.2m$32.4m
Net Profit After Tax$65.4m$31.6m
Revenue$2.5 bN/A

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