Tuesday 19 July 2016 04:05 PM
Silver Fern Farms says profit wiped out in 2016
By Edwin Mitson
July 19 (BusinessDesk) - Silver Fern Farms, the country's largest meat processor, has warned farmer shareholders that it
now expects to only break-even in the current financial year, down from a pre-tax profit of $27.16 million in the
previous year.
It had earlier warned in April that profits would be "materially below" 2015. Silver Fern Farms' financial year runs to
the end of September.
The Dunedin-based meat company has agreed to sell a controlling stake to China's Shanghai Maling Aquarius, but the deal
is still being considered by the Overseas Investment Office. An earlier deadline of June 30 has passed, but a new
deadline of Sept. 30 is now in place to secure OIO approval. Shareholders backed the sale by 82 percent, but a special
shareholder meeting has been called for Aug. 12 by sale opponents although SFF management says its outcome is not
binding and cannot undo the previous vote.
In its winter newsletter, chairman Rob Hewett and acting chief executive Dean Hamilton describe the profit slump as
"disappointing" and blame, "lower national volumes and lower margins (exacerbated recently by the NZ dollar strength)".
For the nine months to the end of June, beef processed was down 4 percent compared to the same period a year earlier,
sheep was down 3 percent and venison fell 17 percent. Hewett and Hamilton also warn that the decision by British voters
to exit the European Union in a referendum last month "has had a meaningful negative impact on NZ returns, in particular
for lamb" largely due to the vote's impact on the British pound and Euro currency.
(BusinessDesk)
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