Rebranded Landcorp pays first dividend in four years

Thursday 30th August 2018

State-owned Landcorp Farming has paid its first dividend in four years as earnings rose on increased livestock sales.

The Wellington-based company paid a dividend of $5 million, its first since the 2013/14 financial year. Landcorp refrained from making cash returns to shareholders, reinvesting in new initiatives and later repaying debt instead.

Revenue rose 7 percent to $247.1 million and earnings before interest, tax, depreciation, amortisation and revaluations met guidance at $48.5 million, up from $35.6 million in the prior year. The jump was largely due to higher revenue from livestock, driven by strong prices for sheep meat that rose on average by 28 percent. Volumes, however, dipped 6 percent. Deer volumes were broadly flat but prices were up 22 percent. Beef volumes were up 12 percent and prices were steady. The lift in livestock revenue was partially offset by declines in milk revenue and wool.

"The ebitdar result was assisted by an upswing in prices for core dairy and livestock businesses, and the continued delivery of Pāmu’s strategy to move into products which attract a premium," the company said in a statement published on its website. Pāmu Farms of New Zealand is the brand name for Landcorp Farming.

“Our focus on producing premium products is about transitioning Pāmu beyond commodity products which fluctuate greatly in price. Our goal is leadership and excellence across our farms and broader land use activities while also producing a range of specialty food and fibre products that command consistent margins. For example, positioning Pāmu’s products to align with growing consumer demand for ‘alternative’ dairy foods," said chief executive Steven Carden.

Pāmu produces high-quality milk, lamb, beef, venison and wool products from 125 farms spread throughout the country. It's focusing on improving the resilience and performance of its core farming business, ongoing expansion of forestry, and developing partnerships to expand production of plants for specialty foods and fibres, said Carden.

The dividend is payable on Oct. 15.

Net profit dropped to $34.2 million in the year ended June 30, versus $51.9 million in the prior year. The results include an $18.2 million decline in the value of livestock and an $11.2 million increase in tax expenses, due to a higher deferred tax liability caused by non-cash items relating to livestock, carbon credits and forestry revaluations, it said.

(BusinessDesk)

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