Meat processor and exporter Silver Fern Farms (SFF) has made a loss of $28.6 million after tax for the year ending September 2013 from total revenue of $2 billion.
The loss follows the $31.1m loss last year after a volatile trading phase when buyers baulked at high-priced lamb and sheepmeat, leaving meat companies with large stocks and lower demand.
SFF has completed a two-year programme to work through the after-effects of the sheepmeat market spike then collapse from January last year.
The farmer-owned co-operative has extended its banking facilities, but says the business remained in good heart.
Chairman Eoin Garden said the company's equity position of 39 per cent remained healthy and the business platform was sound and competitive.
"We have negotiated increased funding lines as part of a new two-year banking facility - SFF will continue to manage the seasonal crop to market over the 12 months to come, in a manner which ensures continuity and security of supply to the market."
He said market consumption and pricing continued to decrease in the first half of the 2012-13 year after the sheepmeat market collapse resulting in further a write-down of stocks.
"We carefully managed stock to market to avoid further price depreciation impacting on procurement values going forward," Garden said.
"In reality, the market collapse dramatically impacted upon two financial years due to large stock positions over the September 2012 balance date."
Profitability was also affected by sheepmeat held up at the Chinese border by a paperwork wrangle, and the Russian flow-on materially affected SFF shipments.
On a positive note, beef, venison and co-products performed well over the period.
SFF's joint venture with Proliant for bovine serum and other initiatives were set for further revenue lifts over coming seasons.
SFF said the co-operative had continued to focus on investment in programmes such as FarmIQ, a new livestock booking system, investment in plant reconfiguration, the Reserve beef range and its eating-quality grading system, in line with company's market-focused plate-to-pasture strategy. These were set to bring returns and efficiencies over the coming year.
Garden said the investments were designed to secure greater market returns for suppliers into the future.
"The Silver Fern Farms board believes for the industry to be competitive in the sector, a serious commitment to on-going investment is required," he said.
"Our future depends upon shareholders understanding and supporting that commitment."
Major changes made to the business included a new regional livestock-buying approach to align it with local plant needs, a new geographic sales structure, and the reshaping of processing plants to meet demand and requirements for the growing Chinese market.
Systems were in place to give farmer shareholders preference over farmers who did not own shares in the co-operative and reward them with better payments and contracts and future dividends.
SFF said the outlook for the year was favourable for the business. This was being driven by growing demand from China, lower global availability of sheepmeat supply, and an awareness by key European and US markets of the need to secure stock to avoid being unable to meet consumer demand.
However, it remained wary of prices rising beyond consumers' reach.
The co-operative said it was a strong supporter of industry reform and was working with PricewaterhouseCoopers to carry out a strategic review of the business, focusing on future options on the back of stalled industry reform talks.
"It is clear something needs to change, and as a farmer-owned co-operative it was incumbent on us to not only ascertain the appropriate path for our Silver Fern Farms' shareholders, but also how we can make a difference within the overall industry model," Garden said.
PricewaterhouseCoopers would report to the board mid-way through the season.
The $2b turnover is down from $2.03b and the 39 per cent equity ratio down from 42 per cent.