Pāmu (Landcorp Farming Limited) made a net profit after tax (NPAT) of $68 million for the half year ended 31 December 2019 compared to NPAT of $29 million for the half year ended 31 December 2018.
Chief Executive Steven Carden said the result was pleasing but cautioned that the second half was throwing up some uncertainty related to the impact of the coronavirus and climate conditions.
“We are pleased with our half year result, the result of positive trading conditions and a focus on operating performance at Pāmu.
“Our EBITDAR (earnings before interest, tax, depreciation, amortisation and revaluations) for the half year, which is our preferred measure of performance, saw a gain of $22 million compared to a loss of $3 million in the half year to December 2018, which is very solid.
“Pāmu is currently forecasting a full-year EBITDAR of between $73m and $78m however the impact of the Coronavirus outbreak and very dry climatic conditions in the north, may see us revise this as the second half of the financial year progresses.
“The company has diversified its income sources in recent years and will continue to implement programs that mitigate the impact of climate change and biosecurity risks.
“Our strategy has focused on increasing the resilience of our pastoral farming operations through farm system innovation. We have also moved to shift to land uses tied to forestry and horticulture. This strategy is helping to both improve profitability and lower the environmental impact of our operations.
“As important as our financial result has been the progress made in improving our health and safety performance, lowering our environmental impact through a range of initiatives, and improving the conditions of the animals in our care,” Mr Carden said.
The increase in EBITDAR reflects an increase in revenue of $12 million, decreased expenses of $7 million and a realised gain of $6m from the sale of shares in the Westland Dairy Co-operative.
The decrease in expenses is primarily due to the impact of a new accounting standard for leases (NZ IFRS 16) which was adopted on July 1st 2019. Under this standard, operating lease costs ($7m for the half year) are no longer reported within operating expenses, while additional depreciation ($5m) and lease interest costs ($6m) have been recognised.
A link to Pāmu’s Half Year report can be found here.
A link to Pāmu’s Disclosure Statement can be found here.