LIC ends year with $30.6m profit

The farmer-owned co-operative's total revenue jumped 10% to $295 million on the back of increased investment by farmers into their herds.

Net profit after tax reached $30.6 million, up from $7.7m the previous year. Farmer shareholders will receive a dividend of 12.22c/share, totalling $17.4m.

LIC board chair Corrigan Sowman says the co-operative is pleased to deliver such a positive result for farmer owners, especially one which reflects the hard work that has been put in to ensure value behind the farm gate.

"In the past 12 months we have seen Non-Return Rates (NRR) of our fresh sexed semen lift to within 1% of conventional semen, we have had close to 1.5 million animals genotyped through our GeneMark Genomics programme and we have continued to work with our industry partners to increase the number of integrations available through our MINDA Herd Improvement platform," says Sowman.

"Whether it's allowing farmers to generate more replacement heifers from their top performing cows, increase certainty around parentage or reduce time spent on paperwork, our co-operative is focused on putting farmers and their herds at the heart of everything we do."

Revenue has increased by 10.4% as farmer shareholders invested further into their herds and the co-operative achieved a 14.8% improvement in underlying earnings, excluding the one-off negative impacts of the semen quality issue and the tax deductability on commercial buildings change included in last year's financial result.

Recent years' investments in digital capability have resulted in a $4m increase in depreciation and amortisation compared to last year and operating cashflows increased by $16.3m year-on-year on the back of improved underlying earnings and prudent capital management.

The co-operative continued to invest into Research and Development, representing a 6% increase on last year at $22.5m.

For the current financial year, the co-operative expects underlying earnings to be in the range of $18-22 million, assuming no significant events, including climate events, or milk price changes takes place between now and then.

From the 2025/26 year, LIC is planning a multi-year investment into customer facing systems and process improvement.

It says this is an important initiative to replace aging legacy systems and improve customer experience, making the co-operative easier to work with.

"This investment is predominantly into software as a service (SaaS) tools, the costs of which are generally expensed as incurred, rather than amortised over future financial periods.

"For the purposes of determining the underlying earnings of LIC, this expenditure will be excluded. Reported Net Profit After Tax (NPAT) will be negatively impacted by the implementation costs incurred within a given year."

The co-operative will also continue to invest in R&D with the next stage of its methane research due to get underway in the last quarter of 2025.