Monday, 16 January 2017 14:44

$7.5m loss for SFF

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Meat processor Silver Fern Farms has reported a net operating loss before tax and impairment of $7.5m million for the 12 months ending September 2016.
The company’s income topped $2.2 billion. This compares to a net operating profit of $30.8m and income of $2.5 billion the prior year. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) were $32.1m, down from $90.5m the prior year. Silver Fern Farms chairman Rob Hewett says while the result was in line with previous guidance of a small operating loss, it was nonetheless particularly disappointing and reflected a very challenging year across the industry. The company managed its way through a tough year as a perfect storm hit with sharp falls in a number of end-markets in the first half, lower industry-wide volumes, unseasonal livestock flows which limited capacity utilisation, and a strengthening NZ currency through the year amplified in June by the Brexit event. “It was one of the tougher environments we have been in for some time as events impacted both beef and sheep, says Hewett. “We made gains through a continued focus on increasing the consistency and value of yields and at the same time driving a greater proportion of sales as chilled and value-added products. These and other initiatives were however insufficient to offset our lower NZ dollar revenue in what remains a highly competitive market for livestock. Chief Executive Dean Hamilton says the disciplines in the business have meant that despite the external conditions, it has continued to manage working capital, risk and capital expenditure prudently. “We delivered a year end net debt down $14m to $107m and with a lower average level of debt we halved our finance costs to $14.8m. “Whilst very disappointing to substantially miss our profitability goals for the year, we achieved good progress in a number of areas – continuing to grow our value-added business, make further significant progress on improving our health and safety performance, and creating a sustainable capital structure for the company.” SFF processed and sold approximately 15 million stock units this year which was an enormous effort by its 7,000 passionate employees, says Hamilton. “Our commitment to their health and safety has seen real progress being made; increased safe behaviour conversations, new enhanced protective clothing and equipment, consistent best practice standards across plants, real time online hazard and incident reporting, and our own ORA review system have all contributed to an over 24% reduction in lost time injury frequency across the company (to a TRIF of 7.6 per 200,000 hours worked). We remain committed to our goal of zero harm by 2020.”

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