People don't appreciate how difficult it is to change farm systems quickly, says Pāmu chief executive Steven Carden.
Reporting on the half-year ended December 31, it posted a net profit of $22m -- made possible by a $39m gain attributed to the value of its livestock.
Without that it would have recorded a $6m loss due mainly to the weather. It made $6.9m profit in the half year to December 2016.
Pamu chief executive Steven Carden says despite its livestock valuation having jumped, the wet spring and then drought pushed up onfarm costs, mostly for extra feed.
“These conditions had a flow-on impact on milk production,” he said. Milk revenue decreased 8.5% on the first six months of 2017.
“An increase in revenue from red meat has been pleasing and helped offset less revenue from dairy and the climatically driven increase in farm costs,” says Carden.
The company advanced on its overall strategy in the half year, including lifting its stake in Farm IQ as part of the latter’s capital raising, and launching the Pāmu Academy to give a oush to health and safety training in farming and beyond.
“While the [weather] remained challenging in January, we are forecasting a full year EBITDA of $33m to $38m,” Carden says.
Prevailing climate and commodity price variations confirm Pamu’s strategy of growing shareholder returns by adding value right along the food production chain, he says.
“While farming remains at the core of what we do, we are also taking a cautious approach to finding high value niche markets for our high quality product, with credible, experienced partners.”
He says the company will only export Pāmu-brand products that are thoroughly tested and where a suitable return on investment can be assured.