Thursday, 18 April 2024 15:12

PGW revises earnings guidance as farmer spending drops

Written by  Sudesh Kissun
PGG Wrightson has revised its operating earnings guidance. PGG Wrightson has revised its operating earnings guidance.

Rural trader PGG Wrightson has revised its operating earnings guidance, saying trading conditions have deteriorated since the last market update in February.

The listed company now expects operating earnings before interest, taxes, depreciation and amortisation (EBITDA) for year ending June 30, 2024, to be $43 million, $7m below the previous forecast.

PGW chair, Garry Moore says market conditions are impacting the whole of the agricultural sector.

He says farmers are spending less because of several factors - drought conditions across much of the East Coast, Tasman and Northland over the first quarter of 2024, weak sheep meat demand from China and increased supply culminating in lower farmgate returns and higher interest rates and elevated input costs impacting on-farm and on-orchard profitability.

Moore notes that although the harvest season has been broadly positive there is a time lag in the conversion cycle before farmers and growers see the financial benefits from their harvest production.

“Whilst we have seen a slight uptick in farmer and grower confidence in recent months, this is off a low base and sentiment in the sector remains subdued.

“This manifests in reduced investment and spend decisions on farm and orchard. Consequently, we are seeing some clients defer spend where they can and hold off on discretionary items. In this context PGW’s outlook for the remainder of the financial year remains cautious,” says Moore.

However, despite the present difficult market conditions, Moore remains positive about the prospects for the sector over the medium to longer term.

“We have confidence that PGW is well placed to support our clients through these challenging times and beyond. As a business, PGW does well when our clients prosper and consequently the converse is true that when times are tough for our clients this also impacts our performance. Notwithstanding the difficult trading conditions, PGW continues to maintain and grow share in the markets in which we operate.”

More like this

PGW feeling the pinch

Rural retailer PGG Wrightson (PGW) is feeling the impact of the current rural downturn, reporting a 40% drop in net profit to $12.7 million in the six months to December 31, 2023.

PGW's challenging half-year

The second half of 2023 gave rural retailer PGG Wrightson a challenging result, but there’s still room for positivity on the horizon, according to chief executive Stephen Guerin.

Board upheaval at PGW

The board of rural trader PGG Wrightson Limited has agreed to call a special meeting demanded by its largest shareholder.


Feds make case for rural bank lending probe

Bankers have been making record profits in the last few years, but those aren’t the only records they’ve been breaking, says Federated Farmers vice president Richard McIntyre.


MPI cuts 391 jobs

The Ministry for Primary Industries (MPI) has informed staff it will cut 391 jobs following a consultation period.

Fonterra unveils divestment plan

Fonterra is exploring full or partial divestment options for its global Consumer business, as well as its integrated businesses Fonterra…

Machinery & Products

GPS in control

In a move that will make harvesting operations easier, particularly in odd-shaped paddocks, Kuhn has announced that GPS section control…

» Latest Print Issues Online

The Hound

Wrong, again!

OPINION: This old mutt well remembers the wailing, whining and gnashing of teeth by former West Coast MP and Labour…

Reality check

OPINION: Your canine crusader gets a little fed up with the some in media, union hacks, opposition politicians and hard-core…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter