Artificial breeding company Livestock Improvement (LIC) has posted a 21.6% drop in underlying earnings as the half year reporting season begins.
LIC's underlying earnings to $19.9 million in the six months to November 2009 was a $5.5 million drop compare
Artificial breeding company Livestock Improvement (LIC) has posted a 21.6% drop in underlying earnings as the half year reporting season begins.
LIC’s underlying earnings to $19.9 million in the six months to November 2009 was a $5.5 million drop compared to the same period the previous year which reached $25.4 million.
Chairman of the farmer-owned cooperative Stuart Bay said the seasonal nature of the business meant the November results were not indicative of what would happen in the second half.
While the results contained the bulk of the company’s revenue, it was not a similar proportion of total costs.
Revenue for the six months to November 2009 was $94.7 million, down from $105.4 million for the same period the previous year.
Mr Bay said LIC’s balance sheet remained strong with total equity of $186 million, compared to $182 million at the same time last year.
Total operating cash flow for the six months was $6.3 million compared to $9.1 million.
Mr Bay said the first six months of the 2009/10 season was challenging for dairy farmers and included the normal uncertainties of farming accompanied by one of the worst downturns in recent memory.
“LIC was one of the first agricultural organisations to step forward with a package of support for farmers to help management cash flow and maintain the quality of herds and the profitability of the farm,” he said.
The package included the removal of interest charges on three month deferred payments.
To cope with lower revenues, salaries were frozen and the capital expenditure programme and operating costs were reviewed and reduced.
Despite this, Mr Bay said use of artificial breeding dropped.
“While the volatility of dairy payout will continue, I am pleased that the equilibrium has been restored to a point where the majority of farmers can maintain and build their business and their profitability.”
