Pāmu Reports $26M Annual Loss Amidst Industry Challenges
Source: DairyNews.today
State-owned farming enterprise Pāmu, formerly known as Landcorp Farming, has reported a $26 million loss for the fiscal year ended June, driven by falling livestock prices, rising interest rates, and the lingering financial impact of Cyclone Gabrielle.
The loss marks a sharp decline from the $9 million deficit recorded the previous year. Revenue for the year dropped 2.8% to $282 million, with livestock revenue falling $4 million to $103 million due to softer market pricing.
Although the company increased milk solids production by 3%, milk revenue remained flat at $120 million, constrained by a lower farm gate milk price. Interest expenses climbed by $3 million, adding to the financial strain.
Pāmu manages 112 dairy, deer, and sheep farms across more than 360,000 hectares of farmland, making it a significant player in New Zealand's agricultural sector.
Despite the challenges, earnings from carbon credits emerged as a bright spot, rising from $14 million to $38 million year-on-year. This growth was attributed to a higher allocation of credits and increased gains from their sale.
Chief Executive Mark Leslie acknowledged the tough market conditions faced by the company and the wider farming community, including declining livestock prices and higher costs. "Despite stronger on-farm performance, factors such as high interest rates and reduced valuations for farms and buildings have significantly impacted profitability," he said.
Leslie emphasized the company's broader contribution to New Zealand's economy, noting its potential to help "double the value of New Zealand exports over the next decade."
The financial results come amid scrutiny from the government. State-Owned Enterprises Minister Paul Goldsmith expressed dissatisfaction with Pāmu's performance earlier this year, though he confirmed there were no plans to privatize the company under existing coalition agreements.
Although the company increased milk solids production by 3%, milk revenue remained flat at $120 million, constrained by a lower farm gate milk price. Interest expenses climbed by $3 million, adding to the financial strain.
Pāmu manages 112 dairy, deer, and sheep farms across more than 360,000 hectares of farmland, making it a significant player in New Zealand's agricultural sector.
Despite the challenges, earnings from carbon credits emerged as a bright spot, rising from $14 million to $38 million year-on-year. This growth was attributed to a higher allocation of credits and increased gains from their sale.
Chief Executive Mark Leslie acknowledged the tough market conditions faced by the company and the wider farming community, including declining livestock prices and higher costs. "Despite stronger on-farm performance, factors such as high interest rates and reduced valuations for farms and buildings have significantly impacted profitability," he said.
Leslie emphasized the company's broader contribution to New Zealand's economy, noting its potential to help "double the value of New Zealand exports over the next decade."
The financial results come amid scrutiny from the government. State-Owned Enterprises Minister Paul Goldsmith expressed dissatisfaction with Pāmu's performance earlier this year, though he confirmed there were no plans to privatize the company under existing coalition agreements.
