27 Oct 2015

Livestock firm anticipates reduced earnings

10:19 am on 27 October 2015

Livestock Improvement Corporation is expecting earnings to fall for the 2015/16 season as farmers reduce their spending with the co-operative during the low dairy payout.

Friesian cow.

Photo: RNZ / Alexander Robertson

While revenue was still expected to exceed that of 2014/2015, earnings were anticipated to be lower to allow its essential capital investment programme to continue, chairman Murray King said .

Mr King said LIC was also committed to ensuring services to farmers were not compromised.

Money had also been spent on increasing and another $5 million had been invested in herd test facilities at Riverlea Road. "That's largely around improving the herd test processing capability, but also more importantly potentially the animal health and diagnostic side of the business, which is growing."

Mr King said the revenue for 2015/16 was steadily increasing on the previous year.

"Going forward we are expecting that things are going to get a little bit tougher. We know on farm that things are tougher, we're in the second year of a relatively low milk price and certainly below where most farmers can operate a sustainable business.

"We're mindful of that and earlier in the year we decided that we would offer a number of initiatives to help our shareholders through the tough times of this season ... things like deferred interest on a number of products and services."