Landcorp profit rises
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.