December 10, 2013

 
ANZCO's losses turn into profit

 

 

 

For the year to September, ANZCO Foods, New Zealand's meat exporter, has turned around its last-season loss to record a post-tax profit of NZD12.2 million (US$10.1 million) which comes from total revenue of nearly NZD1.3 billion (US$1.1 billion).

 

It is an improvement on the NZD19.1 million (US$15.8 million) deficit during a difficult 2011-12 season for red-meat trading and the company says its books are in a healthy position.

 

ANZCO was begun by Sir Graeme Harrison, who is company chairman, and is owned by three shareholder groups led by Japanese company Itoham Foods.

 

In order to end the rumours about the company's performance, Harrison said ANZCO had taken the unusual step of announcing its audited financial results well in advance of the March-end company-reporting deadline.

 

ANZCO's previous result was its first bottom-line loss from New Zealand operations, and came when the industry struggled with market volatility, falling lamb prices, farmers keeping stock to feed them to better weights and companies having to offer high prices to get stock through processing lines, he said.

 

However, it still generated a strong operating cash-flow surplus and this was improved during the 2012-13 year, Harrison said.

 

Positive cash flow from operating activities was NZD41 million (US$34 million), up NZD5.8 million (US$4.8 million) on the previous year. The company's total revenue grew by NZD70 million (US$58 million) or 6%. Shareholder funds sat at 47% of total assets - within the company's policy of 40% to 55%. Total revenue was up from NZD1.21 billion (US$1 billion).

 

Harrison said ANZCO recognised the on-going decline in sheep and cattle numbers and had favoured finding an orderly solution to work out the removal of processing over-capacity.

 

ANZCO was among companies and co-operatives in talks this year to see if there was common ground for turning around some of the red meat industry's problems. The talks eventually faltered.

 

Managing director Mark Clarkson said solid progress had been made during the past year in advancing the company's business, adding more value to food products, ingredients, and health products.

 

"We have invested in a joint venture in a Melbourne-based pharmaceutical manufacturing company, Bovogen Biologicals Pty, purchased the former Hamilton-based Aria Farm and transferred this to our Waitara manufactured foods site, and expanded a jointly-owned Hawera-based ingredients company Taranaki Bio Extracts Ltd," Clarkson said.

 

The transfer of the ownership of Five Star Beef follows changes to ANZCO Prepared Foods and ANZCO Gourmet Foods, both previously 50-50 joint ventures with Itoham.

 

There has been no change in ANZCO's shareholders since 2001 and the company had paid regular dividends including this year.

 

Clarkson said ANZCO's solid financial position was amplified in the payment security offered to all lamb suppliers through CMP Farmer Nominees.