A strong result in uneasy times
Silver Fern Farms has achieved a strong financial result despite the uncertainty caused by Covid-19.
However, it is still undecided if the meat processing giant will hold its annual farmer roadshows given these uncertain times.
The Co-operative recorded a net profit after tax of $34.9 million for the 2019 financial year while its investment Silver Fern Farms Ltd, reported a net profit after tax of $70.7m for the 2019 financial year.
Silver Fern Farms Cooperative Limited and Chinese company Shanghai Maling own Silver Fern Farms Limited in equal partnership.
Silver Fern Farms Cooperative chairman Richard Young said the results provided stability for both the Co-operative and the operating company.
‘‘The Co-operative is in strong position with no debt.
‘‘Whilst this was achieved last year, we now have a strong platform to weather a period where our country and the world is in a period of considerable economic uncertainty,’’ Young said.
Silver Fern Farm’s result for 2019 was the strongest financial result in the past decade.
Silver Fern Farms chief executive Simon Limmer said the company was robust enough to withstand the global disruption caused by Covid-19.
‘‘Our financial provides a platform
astability to execute our strategy, develop our people, support our farmers and feed New Zealanders and the world with sustainable naturally delicious red meat.
Silver Fern Farms Limited achieved revenue of $2.9 billion, earnings before interest, tax, depreciation and amortisation (EBITDA), including share of associate earnings of $123.4m, and net profit after tax of $70.7m and net profit before tax of $89.6m.
The company again increased the level of capital expenditure, up $3m to $32m over the course of the year.
Total shareholder equity is at $571m up from $501m at the end of December 2018.
Young said the Co-operative was taking a conservative approach to the current operating environment.
‘‘Covid-19 has fundamentally changed the market.
‘‘Market dynamics are changing daily, making scenario modelling of short and medium-term financial inputs difficult to accurately determine,’’ Young said.
Liquidity and cashflow management is maintaining optionality in managing Silver Fern Farms Limited’s relationship with all shareholders in uncertain times.
‘‘We remain confident that Silver Fern Farms Ltd is in a strong financial position,’’ Young said.
However, given the uncertain times Silver Fern Farms Cooperative and Shanghai Maling had requested that Silver Fern Farms Limited defer the dividend payment until the outlook for the global operating environment became clearer.
Silver Fern Farms Head of Communications and Sustainability Justin Courtney said at the time of printing it was not known if the annual farmer roadshows would still be held while the country was in lockdown.
‘‘At this stage we have no made firm plans around how we can run the roadshow.
‘‘We will assess the situation once we get through the Level 4 restrictions,’’ Courtney said.
The Co-operative’s annual meeting will be held as a Virtual Meeting on Thursday April 30.