Sharechat Logo

Silver Fern Farms turns to FY loss on inventory writedowns

Tuesday 13th November 2012

Text too small?

Silver Fern Farms, New Zealand's biggest meat processor and marketer, posted a full-year loss after a drop in demand forced it to write down inventory valuations while it had to compete for livestock at "unsustainable" prices.

The net loss was $31.1 million in the year ended Sept. 30, from a profit of $30.8 million a year earlier, the Dunedin-based company said in a statement. Sales fell to $2.03 billion from $2.1 billion.

The company said the 2011/2012 season began with ideal pasture growing conditions which meant farmers tended to hold back livestock. As a result markets were short of product versus historical supply and global prices for lamb escalated "to unsustainable levels."

There followed a sharp fall in demand and value that was reflected back to suppliers and resulted in writedowns to inventory valuations in the year of about $25.6 million. Throughout, Silver Fern had to continue operating, including having to "compete for livestock at unsustainable prices."

The company's operating cash flow was a deficit of $105.6 million from a deficit of $7.5 million a year earlier.

Shares of Silver Fern trade on the Unlisted platform. They last changed hands at 83 cents, valuing the company at $83.3 million.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar eases on technical factors, buoyed by higher dairy prices
RBNZ eyes Westpac Australia money laundering failures
Heritage buys Golden Healthcare; not mystery Metlife suitor
Alliance margins improve as swine fever boosts global meat prices
RBNZ eyes Westpac Australia money laundering failures
Precinct eyes new developments as Commercial Bay keeps to revised schedule
End to Tower's three year dividend drought in sight
Vital Healthcare's manager appoints new independent director
Argosy lifts first-half profit 15.2% on valuation gains
Metlifecare attracts 'credible' bidder after biggest trading day in 2 1/2 years

IRG See IRG research reports