Satara forecasts significantly lower earnings
Satara Cooperative Group is forecasting "significantly" lower earnings for 2010 compared to the previous financial year, partly due to a lower level of crop processed through the company's facilities.The lower throughput had arisen from a lower
Satara Cooperative Group is forecasting "significantly" lower earnings for 2010 compared to the previous financial year, partly due to a lower level of crop processed through the company's facilities.
The lower throughput had arisen from a lower number of supplying growers and a lower industry fruit yield compared to 2009, the kiwifruit and avocado cooperative said today.
It also expected its deferred tax liability for the 2010 financial year would increase by about $1.6 million and its reported net profit after tax fall by a similar amount, due to the removal of tax deductibility for building depreciation.
In its recent budget the Government announced the removal of tax deductibility of depreciation for buildings with a life of 50 years or more.
The Government was reviewing certain aspects of the change in tax regulations and further adjustment may be made to Satara's deferred tax liability once the review was finished, the company said.
The one-off, non cash tax adjustment had no impact on ongoing underlying business profitability or operating cash flows.
Going forward the loss of tax deductibility of depreciation would be largely offset by the reduction in the corporate tax rate from 30 percent to 28 percent.
The company was expected to remain compliant with its bank covenants in 2010 and beyond, Satara said.
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