Wednesday 20th August 2014
|Text too small?|
Landcorp Farming, the state-owned commercial farmer, slashed guidance for 2015 earnings after falling global dairy prices prompted Fonterra Cooperative Group to trim its forecast payout to farmers.
The Wellington-based company expects net operating profit of between $8 million and $12 million in the 12 months ending June 30, 2015, down from a previous forecast of $20.5 million in its statement of corporate intent, it said in a statement.
"The decrease from the SCI forecast reflects the recent downward revision in Fonterra's forecast milk payment to $6 kg of milk solids," it said. "This forecast assumes there will be no adverse weather conditions, deterioration in the foreign currency of current market prices."
Landcorp issued the warning yesterday, before the latest GlobalDairyTrade auction which showed the mildest decline in five events as a gain in whole milk powder prices offset a drop in skim milk powder.
Commodities, dominated by dairy products, are central to New Zealand’s export returns and help drive the economy. Yesterday the Treasury cut its short-term forecasts for economic growth and tax revenue, citing weaker prices for export commodities. Still, it expects prices to stabilise near current levels, saying factors driving them lower are short term, not structural.
Landcorp, which manages 137 farms, more than tripled first-half earnings for the 2014 year as record milk prices drove up income from its dairy operations. In June, it said it expects 2014 net operating profit of $28 million to $30 million. The earnings are scheduled for release on Aug. 25.
No comments yet
Fonterra to go coal-free 11 years ahead of schedule
Huawei committed to NZ even if govt doesn’t come around on spy fears
Mercury points to peaking gains as FY production drops 10%
Asset Plus sells Heinz Watties distribution centre for $29.1 mln
18th July 2019 Morning Report
COMMENT: RBNZ's key political omission in its bank capital proposals
ANZ and Westpac credit rating outlooks downgraded to 'negative' outlook: Fitch
MARKET CLOSE: NZ shares edge higher in quiet trading; weaker currency buoys exporters
NZ dollar stalled amid uncertainty about US rate cuts
RBNZ a 'poor communicator' - CBL's Harris