The Crafar farms controversially sold to Chinese investors have lost more than $1 million during the first year under new ownership.
However, the first annual report shows the farm making progress towards meeting the significant number of conditions imposed on the sale.
The 16 farms, covering about 8000 hectares, were bought by the Pengxin New Zealand Farm Group in December 2012 and are run by Landcorp.
The report released yesterday shows the farms earned $10,481,240 between December 1 last year and June 30 this year.
Expenditure was $11,497,408, resulting in a net operating loss of $1,008,206.
The report cited the severe drought which affected the North Island this year and caused a drop in milk production and an increase in costs as a result of having to buy feed.
"Within six weeks of purchasing the land, the farms were - like most of the North Island - in the grip of the worst drought in 70 years," the report said.
"The critical focus for Pengxin and Landcorp was to manage the welfare of all animals on the property, and protect the farming position for the subsequent season."
One of the conditions imposed on the sale was that Pengxin spend $15.7 million over the following three years upgrading the properties which had been in receivership for three years and which needed significant work.
The report outlined major developments, including renovating dilapidated farm houses, improving the previously contaminated and inadequate water supply, building new cowsheds and effluent ponds and putting gates into paddocks which previously did not have any.
Land Information Minister Maurice Williamson said he was pleased with the progress.
- © Fairfax NZ News