PGG Wrightson seed site hit by Uruguay flooding

Wednesday 20th April 2016

Agricultural products and services company PGG Wrightson has warned investors that its seed cleaning site in Uruguay has fallen victim to that country's widespread flooding.

The company told shareholders in February that its South American business was expected to perform better between January and June. In a statement to the NZX today, chief executive Mark Dewdney said that was no longer anticipated.

"The strength of beef prices gave us reason to believe we would see a recovery in our Uruguayan business at the full year, he said. "While it remains too soon to quantify the full impact of the current flooding, we are now not expecting to see that full recovery in the current financial year".

Even so, Wrightson maintained its outlook for full-year operating earnings before interest, tax, depreciation and amortisation of between $61 million and $67 million, saying it still believes the guidance range is appropriate.

Both the office and the machine processing room at the seed cleaning site near Rosario in Uruguay were hit by flooding. All staff were safely evacuated after moving as much seed and plant as possible to higher ground. Dewdney said the physical damage was not expected to be material, but the broader agricultural sector in the country would be hit.

Businesses in New Zealand and Australia continue to perform well, the company said. However, its PGW Water business has been hit by fewer dairy conversions and irrigation upgrades due to the slump in dairy prices.

Shares in Wrightson fell 1.2% to 40.5 cents and have fallen 7.8% in the past 12 months.

BusinessDesk.co.nz

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