LIC
10/02/2016 15:05
HALFYR
PRICE SENSITIVE
REL: 1505 HRS Livestock Improvement Corporation Limited (NS)
HALFYR: LIC: LIC posts half year result
10 February 2016
Market statement
LIC posts half year result
Livestock Improvement Corporation (NZX: LIC) has announced its half-year
result for the six months ended 30 November 2015.
LIC total revenue for the six month period was $145 million, 9 per cent down
on the same period last year. Net profit after tax (NPAT) was $15.9 million,
down 46 per cent from the previous year.
LIC signalled reduced earnings in October (NZX, 20 October 2015), as a result
of the lower forecast milk payout and reduced spending on-farm.
It is now expected that the year-end result will be closer to a break-even
position, chairman Murray King said.
"The season's lower forecast milk price has created challenging financial
situations for many dairy farmers, and as a co-op we are closely linked to
that.
"This result is a reflection of that, and as we continue our essential
capital expenditure programme; it is very much in line with what we
anticipated in October although we now expect the year-end result to be
closer to a break-even position.
"We continue to actively manage and minimise costs, without impacting our
service to farmers. It's times like this when service becomes even more
important, so we are hugely focussed on that. We have made significant
reductions in our operating costs over the last six months and these will be
sustained through the rest of the year."
LIC has continued to invest in its information systems, to enable improved
service delivery as well as faster development of new innovations, to help
farmers make real-time decisions and to add value on-farm. This is reflected
in the lower NPAT, from increased depreciation costs.
King said the artificial breeding (AB) season remained relatively strong,
with the co-op supplying genetics to breed over three-quarters of the
national herd.
"As expected we have seen farmers revise their budgets, but most were still
willing to invest in solutions that will deliver a return for their business,
and the herd improvement services we offer are key to that.
"We focussed on providing top quality and good value genetics, software and
farm automation offerings to farmers."
Summary, Half Year Result
LIC revenue and other income for the six months to 30 November 2015 was $145
million, 9% down on the $159 million achieved during the same period in 2014.
Net profit after tax for the half year was $15.9 million, down 46% from the
previous year.
LIC's business, particularly artificial breeding (AB), is highly seasonal.
Half year results incorporate the majority of AB revenues but not a similar
proportion of total costs, and are therefore not indicative of the second
half, nor the full year, result. No dividend is therefore declared at half
year.
LIC continues to operate a strong balance sheet with total assets including
cash, software, land and buildings and bull teams of $371 million. Cash flows
from operations were a negative $17 million reflecting extended terms given
to farmers to assist their on farm cash flows. This compares to cash flows
from operations of $6.6 million in the half year to 30 November 2014.
ENDS
Contact: Ashleigh Sattler, [email protected] 027 617 1942
About LIC
LIC is a farmer-owned co-operative that provides a range of services and
solutions to improve the productivity and prosperity of farmers. This
includes dairy genetics, information and automation technology, herd testing
and DNA parentage verification. Subsidiary business LIC Automation also
provide integrated automation systems and unique milk testing sensors that
present real-time data while a cow is being milked.
With origins dating back to 1909, LIC has a long history of world-leading
innovations for the dairy industry.
Today the New Zealand-based co-op employs more than 800 permanent staff,
swelling to 2000 during the peak dairy mating season. LIC also has offices in
United Kingdom, Ireland, Australia, and Brazil.
All LIC profit is returned to its farmer owners/shareholders in new
solutions, research and development or dividends.
More information: www.lic.co.nz
End CA:00277467 For:LIC Type:HALFYR Time:2016-02-10 15:05:19
(20min delay)