Disruption a constant for SFF

Limmer’s comments come after the release of the meat company’s annual results, which saw a net profit after tax of $189.3m – up from $103.8m on a year ago.

Limmer says he was pleased with the result, given the disruption of the past three years.

“I think what’s important is there’s good balance across our business and our broader stakeholders and communities,” he told Rural News. “That, to me, means that we’re able to share some really strong results and value back to farmers and whilst there is still volatility in this industry, it means we’ve still got to invest in our strategy.”

That strategy, which Limmer describes as market-led, is about understanding and finding pathways to consumers who are thinking about the meat they are consuming.

“We believe that if we are understanding and finding pathways to consumers who are really thinking about their food and the meat that they’re eating that we will be able to deliver the attributes that come out of our New Zealand production systems and our Silver Fern Farm products,” he says.

Limmer believes consumers are increasingly conscious of the nutritional benefits of the food they eat as well as the way in which it is produced, the social impacts and the animal welfare impact of it.

“With all of those things, we have an exceptionally good story to tell from New Zealand and backed up with integrity.”

Additionally, Limmer says that climate change is a major part of those conversations consumers are having.

“Climate change is a conversation that we hear every day around the world and food production systems and meat is something which is often bundled up into that conversation,” he says.

Limmer says that New Zealand’s food production system has a good story to tell in terms of integrity and what happens on-farm and on-farm emissions, but it’s not perfect.

“We’re evolving and we have the opportunity continue to evolve quite progressively but when we tell that story, when we build that integrity, take it to the market, to those consumers, it is really resonating.”

Limmer says staffing is still proving challenging.

“The labour market, obviously, is very constrained. Some of the immigration settings have been quite challenging,” he told Rural News.

He says there’s a component to the situation which is down to inflation “which is impacting everybody”.

However, Limmer says he is thankful Silver Fern Farms has done well to gain overseas workers through its Approval In Principle (AIP) schemes.

Those schemes allow the business to recruit overseas workers already in New Zealand during peak times.

“That’s been a big improvement over this season compared to the last,” he says.

“I think the way that we’re going about recruiting people and thinking about how we build pathways and careers within our businesses is really important, but we are still constrained by labour and it’s just a reality of the primary sector and probably others at the moment.”

He says he is optimistic for the future of Silver Fern Farms over the next 12 months, even as the market starts to feel downward pressure from overseas.

“Disruption has been a pretty constant theme over the last few years and, again, to deliver strong performance and keep finding solutions in that context has been really satisfying so I’m optimistic that we will continue to find solutions.

“We’ve seen some quite significant downward pressure in market returns in the last six months, particularly given some of the economic woes around the world and the lockdown in China,” Limmer says.

“I’m optimistic that the underlying demand for our products is still going to be strong in the medium-term and the attributes that we’re taking to market will continue to resonate with consumers.”

Results At A Glance

Silver Fern Farms Limited result for the 12-months to 31 December 2022:

• Revenue $3,273.7m (FY2021: $2,749.6m)

• Earnings before interest, tax, depreciation and amortisation (EBITDA) including share of associate earnings $301.3m (FY2021: $179.7m)

• Net profit before tax $262.6m (FY2021: $143.5m)

• Net profit after tax $189.3m (FY2021: $103.8m)

• Total Livestock Programme Premiums in 2022 $10.3m (FY2021: $6.9m)

• Increased investment in capital expenditure, up $35.5m to $96.0m.

• A 100% imputed dividend declared in relation to FY2022 $76.9m (FY2021 $46.7m) – this includes an interim dividend already paid of $31.9m

Silver Fern Co-operative result for the 12-months to 31 December 2022:

Net profit after tax $94.1m (FY2021: $51.5m)

• Dividend to be received by April based on FY2022 $38.45m (FY2021: $23.4m)

• No debt. Cash and short-term deposits of $34.6m

• Total shareholder equity of $438.4m (FY2021 $369.0m)

• Co-operative declares total dividend and patronage reward for shareholders of $33.5m (FY2021 $18.4m)

• A 100% imputed dividend of 23.2 cents per share payable to all ordinary and rebate shareholders – this includes a 10.1 cent per share interim dividend which has already been paid. Remaining dividend of 13.1 cents to be paid on 28 April.

• A 100% imputed patronage reward of 21.6 cents per share is payable on qualifying shares to supplying shareholders based on supply during 2022.