Sharechat Logo

Alliance lifts annual earnings 28% as sharper operations offset strong kiwi, weak prices

Friday 11th November 2016

Text too small?

Alliance Group, New Zealand's second-largest meat cooperative, boosted annual earnings 28 percent as plans to overhaul the business reducing debt and automating processing cut costs, more than offsetting weak meat prices and a strong kiwi dollar eroding revenue.

Pre-tax profit rose to $10.1 million in the year ended Sept. 30 from $7.9 million a year earlier, the Invercargill-based company said in a statement. Revenue fell to $1.36 billion from $1.49 billion a year earlier, though plans to improve the operations delivered gains of $56 million, ahead of the budgeted $34 million and debt was slashed to $41 million from $129 million. 

"The weakening of market prices and global volatility over the year reduced group revenues, but the value created from our strategy projects meant the cooperative was able to act as a buffer and absorb some of the impact on our farmer shareholders," chief executive David Surveyor said. "We would have liked to have absorbed more and remain committed to finding ways to pay farmers more for their livestock." 

New Zealand's meat sector has gone through a major shift this year with the country's biggest processor, Silver Fern Farms, getting approval to pool its assets into a new entity effectively controlled by China's Shanghai Maling Aquarius, while more recently Blue Sky Meats said China's Heilongjiang Binxi Cattle Industry Co was poised to make a takeover offer for the Southland-based firm. 

Alliance has changed its capital structure to get its farmer shareholders to share up relative to their supply, and introduced new automated systems to improve its operations, something it says it will keep doing. The company had shareholder funds of $302.5 million, down from $308.9 million.

The cooperative raised its dividend to its 5,000 or so farmer shareholders to $9.8 million, having not paid a distribution last year.

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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report