NZ Farming Systems confirms loss forecast

Friday 29th January 2010

NZ Farming Systems Uruguay reiterated its target for a full-year loss, saying milk prices will be volatile after three months of gains.

The loss before interest and tax will be no more than US$10 million, the company said today, reiterating the forecast it made on December 17.

Milk production this year will be towards the lower end of its 80 million to 85 million litre range.

Farming Systems has to defer development of its farms in late 2008 as the credit squeeze bit. In the six months ended December 31 milk production surged 70% to 42.1 million litres, as the company expanded its farming operations. It has five new milking sheds scheduled to begin production in autumn 2010.

The company’s forecast assumes an average milk price of 25 US cents a litre, up from the 23.9 cents it fetched in 2008/09. The price climbed to 29 cents in December from 27 cents the previous month.

Farm working expenses fell 15% in the first half, reflecting lower pasture and supplementary feed costs, driven by a slide in the price of fertilizer.

Shares of Farming Systems rose 2.3% to 45 cents on the NZX today and have fallen 25% in the past 12 months.

The company is due to release its first-half results on February 16.

Businesswire.co.nz

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