April 25, 2008

 

Efficiencies improve PPCS' half-year results
 

Press Release

 

 

New Zealand meat exporter PPCS Ltd reported a positive result for the six months ended February, with profit after tax of NZ$11.2 million compared with a loss of NZ$14.6 million for the same period last year.

 

Eoin Garden, PPCS Chairman, said results from the business were encouraging but hollow while shareholders continued to receive unacceptable returns which, coupled with the climatic conditions of the past season, has put many suppliers under significant pressure.

 

An analysis of the six-month average foreign exchange rates for the year showed NZ dollar increases of 13 percent, eight percent and 0.5 percent against the US dollar, the Pound and the Euro respectively.

 

This saw revenues remain static at NZ$885 million (February 2007: NZ$872 million) - mutton volumes increased while lamb, beef and venison were comparable to the same period in 2007.

 

Keith Cooper, PPCS Chief Executive, said it was encouraging to see farmer payments being maintained in peak season for cattle in the face of an appreciating currency, and an improvement in lamb prices over last year.

 

''This reflects cost containment measures related to plant operating costs and overheads, which have also proved effective in spite of inflationary pressures during the period. That said we are acutely

aware of the need to further and substantially improve returns to suppliers,'' Cooper said.

 

He added it was a further reflection of the success of marketing efforts, translating to improved returns, in particular for lamb suppliers.

 

''In our view, this bodes extremely well for the coming season. These outcomes demonstrate the positive impacts of our evolving business model and the benefits of our 'Rightsize' business re-positioning strategy, coupled with absolute dedication from management and staff to PPCS and its objective of delivering superior sustainable returns to its shareholders,'' said Cooper.

 

Cooper also said the financial performance also demonstrates the positive impact that the commitment to debt reduction brings through to the bottom line. Debt had come down by NZ$63 million year-on-year.

 

(As of April 25, US$1 = NZ$1.26)