Wednesday, 22 June 2016 08:55

PGG expects a better year

Written by  Pam Tipa
Mark Dewdney. Mark Dewdney.

Plenty of "positivity" in sectors of NZ agriculture has offset the effects of the dairy downturn and difficulties in South America for PGG Wrightson (PGW), says CEO Mark Dewdney.

The company has raised its forecast earnings before tax to $65 to $68 million for the year ending June 30, from the previous guidance of $61 to $67m indicated in April.

Speaking from the Fieldays, Dewdney says people are out and there's a lot of positivity.

"Some sectors of agriculture in NZ have been tough, most notably dairy, but sheep and beef has been good and horticulture is going well," Dewdney told Rural News. "Agriculture in NZ is not just all dairy.

"Our business has performed well, the strategy is clear, our people are highly engaged and clear on what they have to do and relationships with clients are good.

"We have been able to offset some of the decline in dairy by really good performance in other sectors. Wool and the real estate business have gone well.

"The market is not as tough as some are making out. I'm not saying it's not challenging – it is. But there is still business out there and we were lucky enough to get a good share of it."

Some sectors of agriculture in NZ are positive and it comes down to how good your people are and how strong client relationships are, Dewdney says.

"We feel like things are going well for us in those areas," he says.

On the products side, the agricultural chemical business has performed well, particularly in horticulture, as have the crop and feed and livestock businesses. Australia is trading is well.

Kiwifruit, the wine industry and apples are strong and vegetables and other pipfruits are good.

South America has been challenging for PGW, he says. Soya prices have fallen about 50% and milk prices in Uruguay fell about 50%.

In April major floods affected Uruguay and Argentina, damaging huge areas; soya and rice had basically stopped. The company has already advised the markets of that.

"But we have been able offset our declines in South America with good performances across our NZ businesses."

PGW expects to announce its full year results on August 9.

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