Hamilton-based dairy genetics heavyweight Livestock Improvement Corporation has announced a net profit after tax of $24.4 million, up $6.8 million from last year.

The company said the profit increase reflected an increase in the fair value of its elite biological assets. 

Excluding the fair value profit and the related tax effect, LIC’s underlying net earnings fell from $17.65m to $14.99m.

Chairman Murray King said all profit is returned to LIC’s 10,500 New Zealand dairy farmer owner-shareholders in either products, research and development or dividends. 

LIC will pay a dividend of $11.9m this year, representing 80 per cent of underlying earnings, to its co-operative and investment shareholders. This compares to $13.6m in 2011, and $7.3m in 2010.

The fully imputed dividend payments will be made to shareholders on August 24, 2012.

King said LIC continued to report a strong balance sheet with total assets including cash, software, land, buildings and bull teams of $260.5m, an increase of $23.6m over the previous year, with an equity ratio of 75 per cent.

Record demand for a growing range of products and services generated total revenue growth of 10 per cent in 2011-12, offset by a $4.7m credit issued to members of the co-operative who were early adopters of genomic technology. LIC revenue for 2011-2012 was therefore $177m, 7 per cent ahead of the $166m achieved last year.

King said the volatility of the dairy industry over the past year saw an increasing number of farmers invest in innovations to improve ease and efficiency of farming, including automation range and parentage verification products.

King said a price freeze LIC applied to all products in the 2009-2010 season, in recognition of the tough financial conditions on-farm, remained in place for LIC’s premier sires in the past two financial years, with only a slight increase in the price of MINDA and herd testing.

These price increases were offset by the launch of free online software products.

King said LIC was pleased the New Zealand Dairy Core Database would transfer from LIC’s stewardship to DairyNZ, following an agreement reached with DairyNZ and the Government.

- © Fairfax NZ News