New Zealand meat firm Silver Fern Farms today (23 October) reflected on a “defining year” for the business despite a slump in operating profits for the year to the end of August.
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Silver Fern, New Zealand’s largest meat processor, has spent much of the last 12 months dealing with the collapse of an equity deal with rural services firm PGG Wrightson.
Last autumn’s global credit crunch put paid to PGG Wrightson’s plan to buy a 50% stake in Silver Fern for NZ$220m (US$166.3m).
The two sides only agreed to a settlement in April, with PGG Wrightson paying Silver Fern NZ$25m and issuing 10m ordinary shares to the company.
The agreement boosted Silver Fern’s bottom line, the company said today. Full-year net profit stood at NZ$43.6m, up 16% on the previous 12 months.
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By GlobalDataHowever, stripping out that settlement and other one-off items left Silver Fern with an operating profit of NZ$5.1m, down sharply from NZ$75.7m the year before.
Turnover inched up 1% to NZ$2.02bn; Silver Fern said the weakness of the kiwi dollar had weighed on sales.
Chairman Eoin Garden said foreign exchange would continue to pressure the business in the year ahead.
“However as much as exchange rate volatility affected the companies result in the year to 2009, the impact in the forthcoming year, based on current foreign exchange rates will have a detrimental impact on livestock values,” Garden said.
“This is particularly frustrating when so much has been, and is being, achieved in maximising value from global markets.”
