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Affco posts $12.3 mln year loss


Friday 29th November 2002

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North Island meat processor Affco Holdings Ltd clocked up a $12.35 million loss in the full year ending September 30.

The result, announced today, included a $2.8 million restructuring charge and compares with a $570,000 profit recorded a year earlier.

Chairman Sam Lewis said it was a "challenging" year, with difficult trading conditions in the first half, although the company returned to operating profit in the second half.

Operating revenues fell to $991.9 million from $1.2 million the year before, as the New Zealand dollar firmed and international beef markets softened.

No dividend was declared.

Affco has pared back its head office staff by two thirds in the past year, and will move to a new base in Horotiu, near Hamilton, next month -- ending almost a century of trading in Auckland.

"With a greatly reduced fixed cost structure and nine strategically positioned plants, the company is now well placed to compete," Mr Lewis said.

Affco expects the move to save $1 million a year.

A $27.1 million rights issue in September strengthened the company's balance sheet, Mr Lewis said, and provided it with greater working capital flexibility.

Affco is not alone in experiencing a tough year. Fellow North Island meat company Richmond recorded a $6.5 million loss for the September year, compared with a $20.7 million profit a year earlier.

Low stock numbers and a firming exchange rate also slashed profits at South Island company PPCS by 77 percent to $8.4 million.

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