Hot Topic NBR Focus: GMO
Hot Topic NBR Focus: GMO
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PGG Wrightson reports $30m loss

Hit by $47 million adjustment; sale of PGG Wrightson Finance imminent.

Niko Kloeten
Mon, 29 Aug 2011

Listed agriculture business PGG Wrightson (NZX:PGW) has slumped to a $30.7 million net loss in the year to June 30, after taking a $47 million hit on accounting adjustments.

The result, which excludes PGG Wrightson Finance, is a big drop from last year’s $23.3 million net profit.

Ebitda fell from $57.2 million to $49.4 million, despite revenue rising from $1.09 billion to $1.24 billion.

However, the increased cost of sales, which rose from $827.2 million to $967.2 million, ate into the improvement in revenue.

PGG Wrightson chairman Sir John Anderson says the livestock and rural supplies businesses performed well and benefited from improved returns at the farmgate.

However, he says the group’s results reflect the impact of extreme wet spring and summer conditions in Australia, the Canterbury earthquakes and a number of restructuring costs.

“We can take a number of positives out of the performance. The balance sheet is strengthened from the divestment of certain non-core assets while the successful conclusion of the partial takeover by Agria provides certainty to the business moving forward.

“Further, we have worked to refocus the group on its key businesses across New Zealand, Australia and South America, ensuring the company has the right people in the right places, while reinforcing our reputation and brand in our core markets.”

In the past 12 months PGG Wrightson sold its stake in NZ Farming Systems Uruguay (NZFSU) and NZ Merino.

The settlement of NZFSU’s performance and management fees and internalization of its management agreement saw parent bank debt reduced to $124.5m at end June 2011 (2010: $177.9m).

The sale of NZ Merino for $7.6m was settled before year end.

Meanwhile, the sale of PGG Wrightson Finance to Heartland New Zealand, announced in June, is “approaching the final approval stage,” according to PGG Wrightson.

PGG Wrightson Finance’s net profit was down 49% to $4.5 million on revenue of $54.2 million (down 7.7%), as it focused on reshaping its asset base, which shrunk by nearly $100 million during the year. 

Niko Kloeten
Mon, 29 Aug 2011
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PGG Wrightson reports $30m loss