State-owned farming enterprise Pāmu is staying optimistic about the future in light of falling profits.
The Wellington-headquartered company with 112 farms under its belt has reported a net loss after tax of $9 million for the year to June - citing property valuation losses, carbon credits and weak commodity prices.
That's down on the $59m profit the year before.
Revenue from livestock dropped $20m to $107m, its milk profits dipped $10m to $120m, and it also suffered a $33m fair value loss on carbon credits due to uncertainty around the Emissions Trading Scheme.
Chief executive Mark Leslie said it had been a challenging year.
"With Cyclone Gabrielle and 20-plus farms impacted and the falling market prices have definitely put a challenge to the business," Leslie said.
"But at the same time, I think we're really trying to set ourselves up to continue to build into the future."
Leslie said the ongoing impacts to cyclone-hit farms in Northland, Te Tai Rāwhiti and Hawke's Bay had hit the balance sheet.
"The direct impact this year, we have seen between $4-5 million in terms of infrastructure, stock losses, impact on forestry and things like that," he said.
"We also believe to address some of those challenges over the next 12 to 18 months, we've probably still got $4-5 million of cost ahead of us. Some of that will be due to reduced stocking on a number of those properties, but equally, it'll also be as a result of new races, new bridges, fencing and things like that.
"And also being really conscious around that climate resilience piece around how do we also adapt going forward, and potentially not building back exactly the same as it's been in the past, but actually setting ourselves up to be more resilient and what that looks like for the future."
The company is expecting reduced income over the next 12 to 18 months.
Based on Fonterra's midpoint milk price forecast of $6.75 per kilogram of milk solids.
Leslie said although the company was in a privileged position to take more risks because it was state-owned and not solely privately-owned, it still faced the same economic pressures all farms faced.
But he was optimistic each farm could make small gains.
"You've got your larger cost lines associated with personnel and wages, then you go into fertiliser, your repairs and maintenance, and feed costs in terms of making silage and things like that. So we're just going through all of those line by line and making sure we're really comfortable that they're efficient," Leslie said.
"And equally, making sure on the other side is that there are opportunities where we could be investing to increase our revenue lines in terms of stock and performance."
He said the company wanted to invest in technology like wearables and diversification of its business over the next couple of years.