New Plymouth District Council's exposure to the Tasmanian dairy industry took a positive turn during the last financial year with a $566,000 profit following a loss of $8.2 million the previous year.The council has a 65% stake in Tasman Farms, which owns
New Plymouth District Council’s exposure to the Tasmanian dairy industry took a positive turn during the last financial year with a $566,000 profit following a loss of $8.2 million the previous year.
The council has a 65% stake in Tasman Farms, which owns 98.15% of Van Dieman’s Land Company in Tasmania and operates dairy and pastoral farms in the northwest of Australia’s island state.
Revenue dropped 24% from $36.6 million to $27.8 million in the year to May, 2010 due to falling dairy prices and production decreases linked to adverse weather.
The 23 farms on Tasman’s books produced 4.02 million kilograms of milksolids for the year compared with 4.16 million the previous year.
Farm gate milk prices fell 20% from $6.55kgMS in the year to May, 2009, to $5.34.
However, on the positive side of the ledger livestock values increased following more recent increases in dairy prices.
During the year, Tasman issued two million shares at a subscription price of $1 a share and then raised a further $6.18 million from convertible redeemable notes issues to New Plymouth District Council.
The funds will be used to finance development of the farms, including wallaby-proof fencing, pasture renewal, soil fertility improvements, water reticulation and dairy shed technology.
During the current financial year, the company concluded a rights issue, underwritten by New Plymouth District Council which raised $6.52 million, to further assist with the planned developments.
In addition, Tasman increased its borrowing facilities from Rabobank Australia to $62.2 million from $55.3 million. The additional funds were used for working capital and development costs during the year.
The company is expecting Fonterra-owned milk processor Bonlac Supply Company to pay a final price of $6.21kgMS for the year, which would provide dairy revenue of about $25.4 million for Tasman.
