Tasman Farms Delivers Record Performance

Tasman Farms Delivers Record Performance

Thu 09 Oct 2014

A record dairy payout, record production and a bounce back in livestock valuations, were the main factors behind the NZ$8.1 million after tax profit from operations, posted by Tasmania-based, New Zealand-owned, Tasman Farms Ltd.

Tasman Farms Chairman Keith Sutton said: “The record profit comes from both favourable market conditions last year and TFL’s increased production arising from investment in growth. The business also focused on reducing operating and overhead costs.

“The milk price for 2014 was up 39 per cent to A$7.07 per kilogram of milk solids (kgms) from A$5.09 kgms in 2013.”

The high New Zealand dollar against the Australian dollar created a currency translation loss as shown in the company’s accounts, but this was hedged in the wider PIF portfolio and had no material impact on the PIF.

“Our 25 farms milked 19,000 cows, we raised over 10,000 heifers, and we increased milk production by 7.5 per cent to 6.72m kilograms this year.

“Milk production for 2015 is expected to be around six percent higher than 2014 at around 7.1m kilograms next year – and we are on budget to deliver this year to date.”

Mr Sutton said: “Despite the recent volatility in milk price from year to year the long-term outlook for Tasman Farms remains very positive. As part of managing volatility, the business has fixed its milk price for 70 per cent of its production for 2015, at levels less than 10 per cent under last year’s record price.

“When we took over the operation at Woolnorth (in Tasmania’s northwest corner) in 2008, production was 3.40m kilogram and it is now 6.72m kilograms (an increase of 98 per cent). We have made these significant gains from improved farm and pasture management, improved herd quality and animal welfare, adding two farm conversions, and a focus on productivity management. We expect further productivity gains to continue to translate into ongoing sustainable profitability.

“The business has also greatly improved its focus on health and safety, animal welfare, and resource and environmental management.

“We continue to expect a steady growth in global demand for milk products, and we are optimistic about the future profitability of Tasman Farms.”

Mr Sutton said: “With the remaining land bank held at Woolnorth still available for additional dairy conversion or development into dairy support pasture, the Company continues to look at capital raising initiatives to bring that land into production and take full advantage of the growing worldwide demand for quality dairy products.

“We have a number of investors engaged in discussions with the Company, who are keen to share in the growth of the business. We believe the opportunities at Tasman Farms will only become more attractive as the operation continues to hit its production, expansion and profitability targets."

© Scoop Media