Landcorps half year financial results

State-owned Landcorp Farming has made a $10.5 million loss in the final six months of last year. It has just released its half-yearly report reports The Manawatu Standard. The loss reflected the sharp fall in milksolid prices, the high cost of operating and negative effects from last year's drought, chief executive Chris Kelly said. The company had previously expected its full-year operating profit would be $15 million. "That is now unlikely to be achieved," Mr Kelly said. The loss for the six months to December 31 compares with a $9 million operating profit in the same period in 2007. Landcorp Farming is a state- owned enterprise, owning or leasing 346,500 hectares of land.It has 112 properties and 1.6 million stock units, and is one of New Zealand's largest farming organisations. Total revenue of $77.6 million for the six months was similar to the same period the year before, but operating expenses were significantly higher at $84.2 million, chairman Jim Sutton said. The company faced higher fertiliser, fuel, electricity and feed costs. Despite the fall in milksolid prices, the high-cost environment and the effects of last year's drought, Landcorp was encouraged by higher sheepmeat and venison prices, and the prospect for improvement in beef prices, Mr Kelly said."In this adverse environment, our focus has been on protecting and maximising Landcorp's capabilities for growth in production and profitability in future years," Mr Kelly said. Landcorp expects annual payouts from its four dairy companies in the 2008-09 year, to fall between 25 and 50 per cent on the year before.During the half-year, it said it strengthened its focus on grass- based systems, with lower stocking rates and higher productivity per cow. It increased its total herd size during the half-year, with the commissioning of two new dairy farms.