Alliance Group makes net loss of $50.8m

TERRI RUSSELL
Last updated 05:00 10/11/2012

Relevant offers

Commercial Property

Porirua has no earthquake concerns with central city buildings We just don't love the mall like we used to: Justin Kean Hospitality lane and offices emerges from the heart of the Evening Post Trade Me lists office space for free, help for displaced staff following deadly quake $500m revamp for Shelly Bay, Wellington Peter Jackson and Fran Walsh expand empire with garden centre deal 'Musical chairs' as quake closes 11 per cent of Wellington CBD space What ever happened to New Zealand's great rock venues? Ground lease interest offered for waterfront petrol station Quake delays building sales, but there's a silver lining in Wellington

Southland sheepmeat processor and exporter Alliance Group has reported a $50.8 million net loss for the year ending September 30 - its first operating loss in 20 years.

As a result, its farmer suppliers will not receive any distribution payments this year.

The decision to cease sheepmeat operations at the Mataura plant, which set the company back $13.5m in restructuring costs, contributed to the loss.

Alliance Group chairman Owen Poole said the loss reflected a substantial change in New Zealand's sheepmeat export markets because of the widespread economic crisis and a strong New Zealand dollar.

"We accept that many exporters and processors like ourselves did not respond to the changing economic environment fast enough and, in an intensely competitive industry, continued to pay too much for livestock for too long," he said.

Despite the loss, the company had made several investments to help with costs, including a $15m upgrade of the beef processing at Mataura, he said.

The company anticipated a much better financial result next year, Mr Poole said.

Federated Farmers Southland meat and fibre spokesman and Alliance supplier Andrew Morrison said he did not expect to see such a significant loss.

Farmers were likely to criticise the company for poor performance but at the end of the day the money ended up in the farmers' pockets because they were paid more for their livestock, he said.

It would be interesting to see if Southland meat companies would work closer together, as suggested in the red meat sector strategy, he said.

The strategy addressed aligned procurement and market co-ordination. "It'll be good to see if they've got the appetite to address either of those issues," he said.

Beef + Lamb New Zealand economic service executive director Rob Davison said Southland processors were forecast to pay about $20 less per head of prime lamb next season.

Blue Sky Meats also reported a net loss after tax, of $449,000, for the year ending March 31.

terri.russell@stl.co.nz

Ad Feedback

- The Southland Times

Special offers
Opinion poll

Do you rent or own your home?

Rent alone

Rent with others

Own with mortgage

Own freehold

Vote Result

Related story: $1m-plus in unclaimed bonds

Featured Promotions

Sponsored Content