Photo: RNZ / Rebekah Parsons-King
Strong agricultural exports and prices have lifted rural services company PGG Wrightson's (PGW) profit by a quarter and allowed a return to dividends.
Key numbers for the six months ended December compared with a year ago:
- Net profit $16.0m vs $12.7m
- Revenue $570.3m vs $561m
- Operating earnings $41.4m vs $36.6m
- Forecast full year earnings around $51m
- 2.5 cents per share vs Nil
PGW chair Garry Moore said the company benefited from stronger demand for beef and wool, a rebound in real estate, and improved farmer confidence.
"Economic conditions are showing early signs of improvement, with several indicators pointing to a healthier outlook with lower inflation and interest rates easing," Moore said.
"A higher forecast milk payout, strong beef export returns, and generally solid commodity prices are beginning to positively impact farmer and grower sentiment."
Profitability across its various businesses improved, with its main Retail and Water division's revenue rising more than 2 percent as farmers and orchardists upped their spending on seed, stockfood, fertiliser, water and fencing.
The Agency division's earnings rebounded from the previous year's slide, as wool prices hit a seven year high, strong pasture growth lifted stock values, and the record milk payout forecast of $10 kilo of milk solids lifted activity and demand for dairy farms.
Moore said the outlook was promising but cautious.
"With economic signals improving, including lower inflation and interest rates together with increased commodity prices, farmer and grower confidence is on the up. The weaker New Zealand dollar is benefiting exporters though this raises the costs of imported inputs."
However, he said the talk of tariffs was raising uncertainty levels.
It forecast full year earnings of $51m, and resumed dividends after savings its cash last year.
