Landcorp, the state-owned farm vying for management fees over the Crafar farms, tripled its first-year operating profit on strong growth in revenue, particularly from livestock.

Net operating profit was about $11 million in the six months ended Dec. 31, up from $3.2 million a year earlier, the company said in a statement. Sales climbed 13 percent to $103 million.

Sales growth at New Zealand’s largest farming company was led by a 27 percent increase in revenue from livestock to $46.3 million, reflecting higher prices for meat and store animals. Dairy revenue rose 2.5 percent to $53 million on higher milk sales. Total expenses rose to $87 million from about $80 million, largely due to the rising cost of fuel.

“In the North Island, Landcorp operations were not constrained by weather extremes as they have been during each of the previous four springs,” the company said in its half year report.

“Grass growth was strong in both islands, and reproductive performance unhindered by storms or exceptional dry conditions. These results were positive for the continued rebuilding of flock and herd sizes following the severe droughts of 2007 and 2008.”

Landcorp expects a positive outcome for 2011/2012, with a net operating profit above $20 million and a $15 million dividend payment for the year.

“The outlook for financial performance over the medium term is clouded by uncertainties in the global economy and demand for commodities, including milk, meat and wool,” the company said.

First-half net profit, which includes changes in the value of livestock required by NZ IFRS accounting standards, rose 73 percent to $71.95 million.

(BusinessDesk)