NZ Farming Systems predicts wider full-year loss on drought

Tuesday 28th April 2009

NZ Farming Systems Uruguay, the group developing dairy farms in South America using New Zealand’s intensive farming techniques, forecast a wider full-year loss because of the impact of drought on milk production.

The loss before interest and tax is expected to be US$20 million, up from an earlier forecast of a US$11 million loss, the company said in a statement.

Rains broke the drought in February but further dry weather has slowed milk production and livestock were sold at lower-than-forecast prices, the company said.

“The recent Uruguayan drought has had significant short-term impacts on the company’s performance, which caused lower-than-expected milk production and lower prices of cattle and higher percentage of re-grassing,” chairman Keith Smith said.

Still, international prices for dairy products “appear to have bottomed,” with the price for the company’s milk lifting slightly to 20 U.S. cents a litre in March, he said.

The shares fell 4.2% to 68 cents on the NZX and are up 17% this year.

Businesswire.co.nz

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