PGW
12/06/2015 12:13
FORECAST
PRICE SENSITIVE
REL: 1213 HRS PGG Wrightson Limited
FORECAST: PGW: PGG Wrightson Trading Update
Chief Executive Mark Dewdney announced today that PGG Wrightson (PGW)*
expects its full year Operating EBITDA excluding earnings of associates**
will be in the $66 to $69 million range, slightly up on the guidance
indicated in February.
Mr Dewdney said, "PGW's trading performance has held up well over the second
half of our financial year in spite of more challenging conditions in the New
Zealand agricultural sector. Overall the business has continued to trade
well to back up the strong performance over the first six months."
"The effects of a dry summer have continued to be felt in some regions and
while these conditions have stimulated some activity for PGW it has impacted
the budgets for a number of our customers. However, the key factor
influencing farmer sentiment is weakening commodity prices. Dairy farmer
confidence in particular has taken a hit with farm-gate milk prices tumbling
together with a realisation that softening commodity prices may continue for
longer than initially anticipated. While the longer-term fundamentals of
dairy demand and trade opportunities for New Zealand remain sound there is
widespread acceptance that the sector is moving into a more difficult
period."
"The improving PGW results we are seeing are a direct result of the hard work
we've put into our business over recent years." Mr Dewdney said. "I'm proud
of what we are achieving in the face of some tough market conditions."
"We expect Livestock to be back on last year, with dairy tallies in
particular down. On the other hand our Seed and Grain business is expected
to improve on last year's result. Seed sales continue to be strong in New
Zealand, and Australia has had a solid year but extremely dry conditions in
Uruguay have meant we haven't been able to grow earnings there this year as
we had planned."
"Looking ahead, reduced farmer confidence in dairy and lamb is creating more
uncertainty than usual regarding spending intentions for next season. This
may result in farmers reducing expenditure which will potentially impact on
our financial performance. However, we still feel there are improvements to
be made across our businesses and believe that PGW is well placed to trade
through any weakness in the market and capitalise upon the opportunities
available."
Alan Lai, PGW Chairman commented "It is very pleasing to see the business
continue to perform well and execute on the strategy. The results the
company is delivering are a credit to the dedicated staff that PGW have right
across the business."
PGW expects to announce its full year results on 11 August 2015 with details
of the announcement to be confirmed closer to the time.
Further information:
Mark Dewdney, Chief Executive
Phone: 027 248 3151
*All references to PGG Wrightson Limited or the Group refer to the Company,
its subsidiaries and interests in associates and jointly controlled entities.
**Disclosure Statement: Non-GAAP profit reporting measures:
PGW's standard profit measure prepared under New Zealand GAAP is
"profit/(loss) for the period". PGW has used non-GAAP profit measures when
discussing financial performance in this document. The directors and
management believe that these measures provide useful information as they are
used internally to evaluate performance of business units, to establish
operational goals and to allocate resources. They also represent some of the
performance measures required by PGW's debt providers. For a more
comprehensive discussion on the use of non-GAAP profit measures, please refer
to the policy "Non-GAAP Financial Information" available on our website
(www.pggwrightson.co.nz) or refer to our previous financial statements for
reconciliations to GAAP profit measures.
Non-GAAP profit measures are not prepared in accordance with NZ IFRS and are
not uniformly defined, therefore the non-GAAP profit measures reported in
this document may not be comparable with those that other companies report
and should not be viewed in isolation or considered as a substitute for
measures reported by PGW in accordance with NZ IFRS.
PGW's definition of non-GAAP profit measures used in this document:
Operating EBITDA excluding earnings of associates: Earnings before net
interest and finance costs, income tax, depreciation, amortisation, fair
value adjustments, non-operating items and equity accounted earnings of
associates.
End CA:00265624 For:PGW Type:FORECAST Time:2015-06-12 12:13:08
