Pāmu lifts operating profits despite challenging climatic conditions
30 August 2018, Wellington, New Zealand - Pāmu (Landcorp Faming Limited) has announced EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization,
and Revaluations) of $48.5 million for the year ended 30 June 2018 (FY18), up $12.9 million (36 percent) from the
previous year. Net profit after tax was $34.2 million a reduction of $17.7 million (34 percent) largely due to lower
gains from biological assets (forestry and livestock) and a higher tax expense.
Directors have declared a dividend of $5 million which will be paid on 15 October 2018.
“We’re focused on operational excellence and sustainably growing our business consistent with our strategy,” said Steven
Carden, Pāmu Chief Executive Officer.
Pāmu recorded 7 percent growth in total revenue to $247.1 million, which included a 15 per cent increase in livestock
revenues and income of $8.1 million from carbon forestry investments. Operating expenses were largely in line with the
The result has been 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. Pāmu continues to invest and realise the growth
potential in its strategy, particularly on high potential land use innovations, as well as concentrating on productive
farming that focuses on the wellbeing of its people, animals and the environment.
“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.
‘Alternative’ dairy foods produced from organic milk, sheep milk, deer milk, and plant milks require an evolution in how
we farm and what we produce. We expect our focus on these opportunities will become a greater contributor to our
business over time. This is an exciting time to be in the dairy industry,” added Carden.
Mr Carden said it was particularly pleasing to see core premiums from milk increase by over $1 million on last year, due
in part from our focus on organic, grass-fed and winter-milk dairy programs.
“It’s hard work but we’re starting to see the results coming through,” Mr Carden said.
Recognising the huge potential for alternative dairy, Pāmu recently launched Pāmu deer milk, which won a Grass Roots
Innovation Award at the 50th Annual Fieldays and is receiving positive reviews from the food trade.
“Innovation within and beyond the farm gate means we are operating beyond our traditional farming model that requires
sustained investment in our people and their wellbeing. It also means diversifying our income streams,” said Carden.
“Our investment in forestry, a key part of our strategy over the last five years, continues to provide positive returns
for the company, and the environment,” Mr Carden said.
The business has seen continued improvements in health and safety with a 25% reduction in significant harm-related
incidents in FY 2018. This reflects a strong focus to embed a health and safety culture into the business, and a greater
awareness of risk management on farms. Pāmu has also made a significant investment in a staff training programme for the
agriculture sector and wider business community, launching the Pāmu Academy.
Mr Carden said the result was particularly pleasing given the tough climatic conditions in the year – including extreme
dry conditions over the summer in the South, and a very wet winter in the North.
Pāmu will focus its attention over the upcoming year on improving the resilience and performance of its core farming
business, ongoing expansion of its forestry portfolio, and development of partnership opportunities to expand its
production of plants for specialty foods and fibres.