PGGW revenue up for first half

RURAL service company PGGWrightson has posted a halfyear rise in revenue to $628.1 million, but adverse foreign exchange rates saw a slight decline in halfyear profit, down $400,000 to $14.6 million.

PGGW yesterday reined back expectations of a 30% decline in fullyear 2018 profit, against the previous year, which has been softened to a 20% decline.

Revenue for its half year to December rose from $607.7 million to $628.1 million, operating earnings before interest, tax, depreciation and amortisation (Ebitda) was up from $26 million to $34.2 million and earnings before interest and tax went from $21 million to $29.2 million.

Aftertax profit dropped from $14.9 million to $14.6 million.

PGGW chief executive Ian Glasson said most of its businesses traded well during the period.

‘‘The [$8.2 million] lift in operating Ebitda on this time last year is heartening and puts us in a strong position as we move into the second half,’’ he said in a statement yesterday.

Much of the earnings of the South American, Australian and Livestock businesses would not be certain until later in the year, but expected full year operating Ebitda in a range of $65 million to $70 million, with aftertax profit about 20% lower than last year.

Revenue in the agency division — livestock, wool, insurance and finance — declined from $91.4 million a year ago to $83.4 million, but profit rose 75% to $2.49 million.

In the retail and water division — supplies, Fruitfed retail, AgNZ consulting and marketing — revenue climbed from $348.5 million to $381.7 million and profit was up 42% $16.7 million.

The seed and grain division — incorporating sales in New Zealand, Australia and South America — lifted revenue from $203.5 million to $208.7 million and aftertax profit was up more than 112% to $2.7 million.

PGGW declared a 1.75c interim dividend.

PGGW shares, up 14% on a year ago, were unchanged at 62c following the announcement yesterday.

Mr Glasson said the livestock business benefited from strong international demand for protein and reduced tallies, which had pushed up livestock prices across New Zealand.

‘‘In addition, our livestock supply chain products continue to perform well.’’

There was an improved performance by in the wool procurement and brokering business, despite reduced demand for global crossbred wool, Mr Glasson said.

The real estate business had a ‘‘challenging first six months’’ but maintained market share and remained well positioned for when market conditions improve, he said.

‘‘Wet growing conditions in spring were followed by dry conditions in November and December,’’ he said.

The impact on horticulture was advanced harvest dates, meaning spray programmes were brought forward and January sales instead occurred during December, Mr Glasson said.

All three retail business areas — rural supplies, fruitfed supplies and agritrade contributed to the pleasing result, he said.

The New Zealand Seed and Grain business had a strong result due to favourable weather conditions in spring, compared to a year ago, he said.