Dairy genetics firm’s profit gets a boost

AUCKLAND: Listed dairy genetics firm Livestock Improvement Corporation has posted a 31% lift in net profit after tax for the 2021 financial year.

Total revenue rose 3.4% to $249 million and the farmerowned cooperative ended the year with no debt.

The dividend to shareholders is slightly down at $17.8 million, compared with $18.1 million in the 2020 financial year.

Equating to 12.5c a share compared with 12.7c in 2020, it will be paid on August 20.

The company attributed the lower dividend to a drop in underlying earnings, which were down 1.9% at $22.3 million, after a oneoff tax benefit the prior year. The dividend represents 80% of underlying earnings, consistent with previous years.

Chairman Murray King said the result was in line with market guidance and indicative of good growth across core business areas, particularly in the premium genetics range.

This range offered farmers young, genomically selected bulls to fast track genetic gain and deliver onfarm value through increased productivity and efficiency, including improved environmental efficiency.

The premium genetics range accounted for almost half the company’s total artificial breeding inseminations — more than double that of three years ago.

It included sexed semen where purchases showed tripled growth on the previous year.

‘‘This growth will have a significant impact onfarm this spring and deliver a huge amount of value to our farmers, with more highquality heifer replacements and fewer bobby calves,’’ Mr King said.

‘‘We’re expecting this to be even greater next year with sexed semen orders likely to almost double again.’’

He said LIC existed to deliver superior genetics and technology innovation to help shareholders sustainably farm a profitable animal.

‘‘We’ve invested heavily into genomics for our farmers because the DNA of our dairy herd can do a lot of the heavy lifting to help meet our sectors’ climate goals.

‘‘Worldleading pastoral dairy genetics and genomics are a much more precise tool for farmers than the blunt instrument of reduced cow numbers.’’

The company invested $17.1 million in research and development, up 15.4% on the previous year. It also spent $3 million improving its Minda Live herd management system, with 66 new features added based on farmer demand.

During the year LIC sold its automation business to a US company for $NZ38.1 million.

The board is considering options for the use of the resulting net assets of $23.8 million now on the books.

Mr King said underlying earnings in the 202122 financial year were expected to be $19 million$25 million, assuming no significant climate event or milk price change, and no major impacts from Mycoplasma bovis disease or the pandemic. — The