Alliance Group makes net loss of $50.8m

Last updated 05:00 10/11/2012

Relevant offers

World News

Explosions kill 86 people at peace march in Turkey's capital Russia steps up air strikes against IS, Assad opponents in Syria Conflicting accounts of Australian tourist bashing in Thailand Bao Zhuoxuan, teenage son of prominent Chinese human rights lawyer, is missing Protesters attack party offices in Iraq's Kurdistan region Tracking murder suspect's NZ movements Pre-election clash in Guinea capital kills two, wounds 33 Life on Mars: Nasa unveils plans for human colonies by 2030s Islamic State closes in on Syrian city of Aleppo Obama meets families of Oregon shooting

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.

Ad Feedback

- The Southland Times

Special offers

Featured Promotions

Sponsored Content