Silver Fern Farms has reported an annual loss of NZ$28.6m (US$23.8m) as the impact of what the New Zealand meat processor calls the “collapse” in the sheep meat market continued.
The loss for the 12 months to the end of September was lower than the year before, when Silver Fern Farms booked a net loss of NZ$42.3m.
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However, turnover dipped from NZ$2.03bn to NZ$2bn and Silver Fern Farms pointed to conditions in the sheep meat sector.
“Market consumption and pricing continued to decrease in the first half of the 2012/13 year resulting in further write downs of balance date stocks. We carefully managed stock to market to avoid further price depreciation impacting on procurement values going forward,” Silver Fern Farms chairman Eoin Garden said. “In reality, the market collapse dramatically impacted upon two financial years due to large stock positions over the September 2012 balance date.”
Elsewhere, the company said its beef, venison and co-products businesses “performed well”.
Silver Fern Farms said it had made “several significant changes” to its operations for the new financial year, including a new geographical sales structure and changes to its production network to meet requirements for the Chinese market. Growing demand in China, plus lower supply of sheep meat worldwide, meant the outlook for the year was “favourable”, the company forecast.
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By GlobalDataHowever, Silver Fern Farms has appointed PricewaterhouseCoopers to undertake a strategic review of the business after stalled industry aggregation discussions.
“It is clear something needs to change, and as a farmer owned co-operative it was incumbent on us to not only ascertain the appropriate path for our Silver Fern Farms’ shareholders, but also how we can make a difference within the overall industry model,” Garden said.
