Allied Farmers Limited (NZX: ALF) FY21 Half Year Report

Friday 26th February 2021

Half Year Result

The Directors of Allied Farmers Limited report an unaudited after-tax profit of $0.531 million for the six months ended 31 December 2020. Pleasingly, this is higher than the previously indicated range of $0.2 million to $0.4 million. While ahead of budget and forecast, Allied Farmers’s pre-tax operating result in this period was lower than the previous corresponding period ($1.18 million), with subsidiary New Zealand Farmers Livestock’s (NZFL) result for the period significantly impacted by Covid-related pricing impacts on veal processing returns.

As in previous years, the returns from the veal processing operations continue to be a major contributor to first half year performance. However, investors are reminded that typically Allied Farmers’s second half year profit is driven by factors distinct from the veal processing results that drive first half year profit. The second half is strongly influenced by livestock trading and herd sale activity, much of which will occur in the later part of the second half, and therefore it is not possible to forecast full year profits based on first half performance.

While 2020 was undoubtedly a challenging year, through the dedication and creativity of our staff, Allied Farmers starts 2021 in a strong position. For this, we thank the whole team.

NZ Rural Land Management and NZ Rural Land Company

NZRLC raised $75 million through its initial public offering (IPO) in late 2020. NZRLM, 50 percent owned by Allied Farmers and NZRLC’s manager, is now progressing due diligence on dairy farms in the South Island for NZRLC. While potential acquisitions were identified prior to the IPO, extensive due diligence (e.g. irrigation reports, soil testing, etc), necessarily has taken time due to the size of the dairy farms. NZRLC has advised its shareholders that it anticipates being in a position to announce the terms of an acquisition in several weeks.

Outlook

The early stages of the second half of the financial year has been dry in some parts of the country and continued disruption to the food export trade and global logistics caused by Covid-19. A return to more normal weather patterns across the country, plus the expected future containment of Covid-19, should support livestock trading activity. We are seeing some encouraging in-market pricing despite the ongoing challenges and the strengthening New Zealand dollar. Allied Farmers is certainly agile and well placed to contribute.

Allied Farmers takes much pride in working with New Zealand farmers who are vital in the global food chain and are known for producing high quality food with care and responsibility.

Richard Perry

Chairman

Please see the links below for details:

FY21 Chair Commentary

Results Announcement

HY21 Group Financial Statements

Source: Allied Farmers Limited

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