Killing season off to a slow start
Variable weather conditions across the country are being blamed for the slow start to the meat processing season.
Meanwhile SFF's parent company, Silver Fern Farms Limited, which the co-op jointly owns with Chinese-based Shanghai Maling Aquarius, reported a net profit after tax of $65.4m for the same period, its second strongest result of the past decade.
These profits came off the back of total revenue of $2.5 billion earned by the company during the year.
SFF courted controversy in 2016 when its shareholders overwhelmingly supported Shanghai Maling's $261 million bid for a 50% in the company, which came into effect in January 2017.
SFF chair Richard Young says the financial result achieved by the co-op and its JV parent (Silver Fern Farms Limited) for 2020 is down to the skill and expertise of its people.
Chief executive Simon Limmer says SFF's financial performance in 2020 showed the company's growing resilience and sustainability of returns.
"We are now showing four years of sustained profitability," he says. "This is the level of financial performance required to provide an appropriate return on investment to our shareholders and enables us to continue investing in infrastructure, systems and the capability necessary to execute our market focused strategy."
Young says the 2020 result follows closely behind the previous year's performance, which was its strongest financial result in the past decade.
"It is a special achievement given the wide range of constraints the company was under throughout the year."
He adds that as of 31 December 2020, SFF remained debt free and had cash on hand of $22.3m, with total shareholder equity of $327.4m.
"We are pleased to be in a strong financial position where we are able to continue to provide returns to our shareholders."
The co-op also declared a distribution of $8.1m in dividends and 'patronage reward'. This means eligible shareholders will receive a 100% imputed dividend of 5.5 cents per share to all ordinary and rebate shareholders. Meanwhile, a patronage reward of 5.7 cents per share will be paid to shareholders based on supply during 2020. The payment date for both is April 28.
Limmer praised the efforts of both SFF's farmers and staff during the year.
"Despite all that disruption, we have witnessed character and resilience throughout our Silver Ferm Farms community, from on-farm right through to our partners in market. The way we worked as a team, continuously finding solutions and lookin out for each other was key to our performance in 2020."
He says the results proved that the company was robust enough to withstand the global disruption caused by Covid-19.
"We have the financial stability to execute our market-focused Plate to Pasture strategy," Limmer added.
"It has enabled use to develop our people, support our farmer suppliers and our communities, and feed New Zealanders and the world with sustainable, naturally delicious red meat."
SFF's annual report has been available since 14 April, ahead of the co-op's annual meeting being held in Dunedin and via livestream on April 29.
Highlights
Silver Fern Farms Co-operative (SFF) result for 2020:
- Net profit after tax $32.4m (FY2019: $35.1m)
- No debt, cash and short-term deposits of $22.3m
- Total Shareholder Equity of $327.4m (FY2019 $304m)
- Dividend and patronage reward for shareholders of $8.1m
- A dividend of 5.5 cents per share to all ordinary and rebate shareholders
- A patronage reward of 5.7 cents per share to shareholders based on supply during 2020.
