Livestock Improvement Corporation (LIC), the listed dairy farmer cooperative, said first-half net profit rose 12.3 percent on growing use by farmers of its herd testing products.
Net profit rose to $28 million in the six months ended Nov. 31, compared with $24.9 million in the same six months a year earlier. Revenue rose 7 percent to $120 million in the six months from $112.1 million in the year-earlier period.
“The result reflects farmer demand for our genetics, our world renowned artificial breeding service and herd improvement products,” chairman Stuart Bay said in a statement.
LIC's business, particularly artificial breeding, is highly seasonal with first-half results incorporating the majority of annual revenues but not a similar proportion of total costs so the first-half results aren't indicative of the second-half or full-year results, the company said.
Net profit in the year ended May last year rose to $17.1 million from $9.1 million the previous year.
Significant solutions provided “for some jobs that can be more frustrating” included working with farmers to improve calving rates, the second year of testing EZ Heat, a product which identifies when a cow is on heat, introducing a cheap bulk test for the bovine disease BVD in the milk vat to replace other expensive and time-consuming testing and DNA testing to identify which cows calves come from.
“Farmers are telling us they're delighted with new ways to make old practices less time-hungry and more reliable and this support is evident in these financial results,” Bay said.
“It is also clear that farmers are focusing on improving productivity on farm and see the value LIC products deliver.”
Sales were up for genetics, herd testing, ear tags and disease results.
Bay said it is “gratifying to see the resurgence of confidence to the dairy industry. Recent favourable climatic conditions throughout New Zealand give confidence that the second-half trading conditions for LIC will remain positive.”
LIC shares last traded yesterday at $5.05, just below its recently reached record $5.10 and well above $3.25 a year ago.
(BusinessDesk)
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