Source: Radio New Zealand
PGG Wrightson is a rural services company (file photo). Supplied
Rural services company PGG Wrightson (PGW) increased its half-year profit on the back of increased sales to a buoyant agricultural sector and farm exports.
Key numbers for the six months ended December compared with a year ago:
- Net profit $17.3m vs $16.0m
- Revenue $619.4m vs $570.3m
- Operating earnings $46m vs $41m
- Full year operating earnings guidance $64m
- Interim dividend 4.5 cents per share vs 2.5 cps
The big driver of the company’s higher profit was the performance of its retail and water division, which covered sales to farms, orchards, and irrigation, which delivered 85 percent of group revenue.
PGW chairperson John Nichol said the company had seen growth through most parts of the rural sector, particularly in red meat, kiwifruit and apples, while improved earnings for farms flowed through to demand for other rural goods and services.
“The first half was characterised by favourable commodity pricing across a number of key segments for PGW’s customers.
“Improved on-farm profitability translated into demand for PGW’s livestock services, pasture renewal, agronomy, and animal health.”
Nichol said the company had also benefited from its diversification through the acquisition of an animal health products company, the launch of a range of agricultural chemicals, and the leasing of a research station in Hawke’s Bay.
The company’s agency group, which handled livestock sales, wool, and real estate sales, also reported stronger earnings as higher livestock, wool, and rural land prices increased demand.
The two sectors under pressure were wine and cropping with subdued demand weighing on sentiment and investment decisions.
Nichol said the second half of the year was expected to remain strong as the first with the broad rural sector set to continue strongly helped by high commodity prices, a soft currency, lower interest rates, and steady profits .
“Overall conditions across agriculture remain favourable, with most parts of the sector performing well, supported by firm global demand and strong commodity pricing.”
The company has forecast full year operating earnings of around $64m.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
