Land­corp profit rises

The Hastings Mail - - OUT & ABOUT - GER­ARD HUTCHING

Bet­ter re­turns from milk, beef and veni­son have lifted Land­corp’s af­ter-tax profit to $51.9 mil­lion on rev­enue of $233.5m for the year ended June 30.

This com­pares to an af­ter-tax profit last year of $11.5m, which was bol­stered by a $7.4m wind­fall on land sales.

But this year’s bot­tom line has also been helped by the sale of three prop­er­ties for $16m.

The op­er­at­ing profit was $5.7m, com­pared to a loss of $9.4m last year.

Last year Prime Min­is­ter Bill English de­scribed the state-owned en­ter­prise and New Zealand’s big­gest farmer as a ‘‘poor in­vest­ment’’, al­though the Gov­ern­ment had no plans to sell it off.

Land­corp will not pay a div­i­dend to the tax­payer this year but use prof­its to pay off debt.

Over the past year it has re­duced debt from $219.6m to $206.9m.

Labour’s Pri­mary In­dus­tries spokesman, Damien O’Con­nor, con­grat­u­lated the SOE on the pos­i­tive re­sult, al­though he said the sale of prop­er­ties should be of con­cern to New Zealand farm­ers who might not have ac­cess to buy­ing them.

Re­cently Land­corp de­cided to ac­cept an $8.7m of­fer from a Chi­nese bid­der for Jeri­cho Sta­tion in South­land, even though a New Zealan­der also made a sim­i­larly priced of­fer.

Chief ex­ec­u­tive Steven Car­den said Land­corp had strength­ened its core busi­ness and im­proved its farm­ing sys­tems, while ex­pand­ing its range of part­ner­ships and Pamu prod­ucts.

‘‘The process of trans­form­ing to a val­ueadd busi­ness is com­plex, but we are con­tin­u­ing to re­shape and in­vest in a fu­ture as a best-prac­tice, en­vi­ron­men­tally sus­tain­able farmer, and a high-qual­ity food com­pany,’’ Car­den said.

Rev­enue for 2016-17 was up 11 per cent on the previous year, while op­er­at­ing ex­penses in­creased 3.3 per cent, which in­cluded costs for trans­fer­ring staff with the end of the Shang­hai Pengxin share milk­ing ar­range­ment.

The com­pany’s to­tal as­sets in­creased to $1.81 bil­lion, a rise of $27.9m on the previous year.

Milk re­turns were $26.3m, or 35 per cent, higher than the year be­fore, as dairy prices re­bounded af­ter fall­ing to their low­est level in 10 years.

Land­corp farms pro­duced 19.5m kilo­grams of milk­solids (in­clud­ing sharemilk­ing) in 2016-17, up from 18.8m in the previous year.

Live­stock rev­enue was up $4m, and there was a $20m in­crease in the value of live­stock re­flect­ing strong mar­ket prices.

Poor wool prices re­sulted in a fall in wool rev­enue but this was not spec­i­fied.

Veni­son re­turns from farms like Ewe­burn Sta­tion, back­ing on to Lake Te Anau, have helped lift Land­corp’s profit.

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