SFF’s Shanghai Maling deal pays $203m of debt
Silver Fern Farms (SFF) has posted an after-tax loss of $5.6 million for the 15 months since Shanghai Maling bought 50 per cent of the company, but a $15.4 million after-tax profit over the last 12 months.
Shanghai Maling’s $260m injection of cash was used to pay off
$203m of debt, with the balance of
$57m paid to a new co-operative structure.
Chairman Rob Hewett said the result was complex to take account of the partnership with the Chinese company, and the
12-month period better reflected SFF’s performance. It was an improvement on a challenging year in 2016. ‘‘This was achieved on similar levels of throughput, and reflected improved in-market conditions for sheep and venison, as well as a reduction in overhead costs following plant closures and management’s ongoing focus on improving efficiencies.’’
From now on New Zealand’s largest meat processor will report at 12-month intervals. For the 15 months ended December 31, the company recorded a net loss of
$5.6m, after taking into account losses from discontinued operations, mainly the closure of operations at Fairton, Ashburton.
The cost of closing the plant and other ‘‘abnormal items’’ was
$10.2m. Hewett said a more meaningful picture of SFF’s performance was represented by the
12-month result.
‘‘For that period, SFF achieved sales of $2.2 billion, [EBITDA] including share of associate earnings of $50.9m, and net profit after tax of $15.4m.’’
During the 15-month period, SFF was owned 100 per cent by the SFF Co-operative, but since December 2016 the move to 50 per cent ownership produced a noncash accounting gain. SFF announced an unimputed dividend of $12m which will be paid to the two shareholders, the Cooperative ($6m) and Shanghai Maling ($6m).