Wednesday 26th January 2022
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Livestock Improvement Corporation (NZX: LIC ) announces its half-year result for the six months to 30 November 2021, which shows continued strength in the farmer-owned co-operative’s financial performance.
Murray King, LIC Board Chair said the Board is pleased to present another strong result to farmer shareholders, particularly after a difficult period of Covid-19 restrictions and increasing cost pressure in the business.
“The LIC team worked hard to deliver a largely business as usual season to our farmers this season, despite our main bull farms and laboratories operating under the Level 3 Covid-19 restrictions that were in place in the Waikato for most of this period.
“Spring is the most important time of year for our farmers, and for LIC, when demand for our essential artificial breeding and herd testing services is at an all-time high. I want to thank our farmers for trusting us to continue to deliver to them during this time.
“It is also pleasing to note that the business has worked hard to manage costs during this time, and we remain on track to deliver another strong result at year-end.”
LIC’s half-year result incorporates the majority of revenues from LIC’s core artificial breeding (AB) and herd testing services, but not a similar proportion of total costs so are not indicative of the second half, nor the full year, result. Revenue from international business, technology products and animal health testing is also spread through the year.
King said the half-year result was driven by more farmers investing in the co-op’s premium artificial breeding (AB) products where young, genomically-selected bulls are used to fast-track genetic gain and deliver more value on-farm through increased productivity and efficiency, including improved environmental efficiency.
No dividend is declared at half-year, however the co-op paid its first special dividend on 21 January to partially distribute funds from the divestment of its automation business in June 2021 (NZX 8 December 2021).
Underlying earnings (NPAT excl bull valuation change)* at year-end is forecast to be in the range of $22-26 million, assuming no significant climate event or milk price change takes place between now and then, nor any major impacts from M. bovis or Covid-19. LIC expects underlying earnings* in 2022-23 to be in the range of $20-26 million.
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