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Blue Sky Meats has announced an after tax loss of $3.8m for the year ending March 31, 2013.
This compares to a loss of about $449,000 in 2012 and a profit of $3.6m for the previous year.
Chairman Graham Cooney says in his annual report that this is the second loss in the company's 27-year history and he hopes the conditions in that period will never be repeated in the New Zealand meat industry.
In that period international market prices for almost all items the company sells reduced at an alarming rate. Some items had not significant market for considerable periods of time. EU challenges and the Northern Hemisphere recession lead to reduced demand and major uncertainty.
In New Zealand animals continued to be processed and the products from these animals, while sitting in store, lost value at alarming rates. The prices paid to farmers reduced over the 2012 calendar year but that reduction was at a much slower rate than the market price reduction.
The overall effect also increased the company's costs, including interest and storage, which was 34.7% higher in June 2012 than in June 2011. Currency movements added to the difficulties.
There were some positives. A strong balance sheet, purposely planned over the many years to cover events such as this, has got the company through a disastrous year. Past investment in the Chinese market paid dividends, with that country now the largest country of destination for both volume and value.
Most importantly the last three months of the financial year recorded profitability similar to historical levels for that time of the year.
No dividend will be paid this year.
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