PGW
20/04/2016 14:37
GENERAL
PRICE SENSITIVE
REL: 1437 HRS PGG Wrightson Limited
GENERAL: PGW: Heavy rainfall and flooding in Uruguay
PGG Wrightson ("PGW") announced today that its operations in Uruguay have
been impacted by high rainfall that has been experienced in Uruguay in recent
days and has caused widespread flooding.
Chief Executive, Mark Dewdney said that "severe flooding in the Colonia
region of Uruguay has flooded our seed cleaning site near Rosario with both
the offices and the machine processing room affected. The good news is that
all our staff are safe and were evacuated from the site after doing what they
could to move seed and plant to higher ground.
"As floodwaters recede our local team and advisers will assess the damage and
loss of seed. Our early assessment is that the physical damage will not be
material, although further time is needed to be more definitive. Of more
concern is the impact that the flood and very wet conditions are having on
the summer crop, autumn re-grassing and farming sector generally. With the
majority of the soya bean crop ready for harvest the rainfall will impact
yields. Large areas of soya bean and sorghum grain are showing
pre-germination symptoms, and this will place additional pressure on the
arable sector in Uruguay.
"At our half-year announcement in February we noted that our South American
business had experienced a challenging first half, but that we were
anticipating a better second half where the focus of the business turns to
inputs into the pastoral sector. The strength of beef prices gave us reason
to believe we would see a recovery in our Uruguayan business at the full
year. While it remains too soon to quantify the full impact of the current
flooding, we are now not expecting to see that full recovery in the current
financial year.
"In terms of the outlook we are maintaining our 2016 full year Operating
EBITDA forecast range of $61 to $67 million. While the difficult conditions
our business is experiencing in Uruguay introduce a real challenge that is
largely outside our control, we still consider this guidance range remains
appropriate. We are however realistic that the tougher market conditions and
inclement weather may push the final result towards the lower end of the
range. We expect to be in a position to provide a further update later in
autumn when we will be able to forecast with more accuracy.
"On a more positive note, our businesses in New Zealand and Australia have
continued to perform well in the financial year to date with the exception of
our PGW Water business, which has been impacted by the challenging conditions
in dairy, resulting in less dairy conversions and irrigation upgrades.
"While there are a wide range of external factors at play that will impact
our performance over the remainder of the financial year, we remain
optimistic about the medium to long term prospects for agriculture, and we
are confident that PGW is well placed to capitalise on opportunities
available in the sectors where we operate."
For 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 measure
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).
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: Earnings before net interest and finance costs, income tax,
depreciation, amortisation, the results from discontinued operations, fair
value adjustments and non-operating items.
End CA:00281125 For:PGW Type:GENERAL Time:2016-04-20 14:37:31
