LIC profit falls by 55%

Livestock Improvement Corp, the dairy herd genetics co-operative, reported a 55 per cent drop in fullyear net profit on higher restructuring costs but was upbeat about the current year as those costs will no longer be incurred.

Net profit for the year to May 31 was $9.3 million versus $20.8m, the Hamilton-based company said in a statement. Reported earnings before interest and taxation were $14.9m, also down 54 per cent.

In both cases, the result was weighed by one-off transformation costs and the annual revaluation of the biological bull team.

However, stripping out $20.7m of those one-time charges and an $8.6m revaluation gain, ebit was $27m versus $9.8m in the same period a year earlier, when just $1.7m of transformation costs were booked alongside a $24.7m revaluation gain.

LIC embarked on a transformation programme after posting its first ever loss in the 2016 financial year as a slump in milk prices saw farmers scale back spending, and in turn, weighed on the value of the company’s elite breeding herd.

While those costs ate into its net profit, LIC reported a record total revenue of $236.4m, up 16 per cent on the year.

“This is a positive result and reflects a strong performance in our core service areas of artificial breeding (AB) and herd testing, as well as continued benefits from our transformation programme,” said board chair Murray King.

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