Friday, March 29, 2024

LIC delivers steady first half

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LIC has delivered a steady interim result in line with expectations during the 2020 financial year, including a small rise in revenue and a small drop in first-half earnings.
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Revenue in the six months to November 30 was $163 million, up 1.4% from the corresponding period last year.

Earnings before interest and tax were $43.1m, down 6.5% and net profit after tax was $30.3m, down 7.6%.

The artificial breeding and farmer information company said earnings and profit were down because of the timing of expenses.

“The co-operative’s guidance for underlying earnings at year-end of $21m to $25m is still expected to be above the prior year ($19.5m).”

The forecast range assumed no significant climate event or milk price drop nor any major impacts from Mycoplasma bovis.

Total assets including cash, software, land, buildings and bull teams were $425m, up from $409m.

Half-year results incorporate most of the revenue from the farmer-owned co-operative’s core artificial breeding and herd-testing services but not a similar proportion of total costs so are not indicative of the second half nor the full year results.

“This is another solid result which builds on all the work we have done in recent years to transform the business and drive an innovation-led growth strategy to keep LIC and our farmers leading the global pastoral dairy system,” chairman Murray King said.

“It requires financial strength, high-performance and a clear focus on the innovations needed on-farm to keep our customers’ farms competitive, profitable, sustainable and efficient.”

LIC continued to provide the tools and services for precision farming in genetics and technological solutions.

Sales in NZ reflected the move towards premium AB products like genomic bulls, sexed semen and genetics offerings in A2A2, short gestation and Wagyu.

Farmers are also adopting satellite pasture management and MINDA animal recording and insights.

King said farmers are using cost-effective, innovative solutions to get more on-farm value and ultimately do more with less. 

That was also evident in the 2018-19 Dairy Statistics with farmers achieving record milk production while cow numbers continue to decline.

The LIC share price is 75c, its lowest in the past year, during which the peak of $1 was reached just before the financial year-end on April 30.

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