Allied Farmers profit falls 39.9 per cent

Press, Volume CXV, Issue 33928, 22 August 1975, Page 12

Allied Farmers profit falls 39.9 per cent

(New Zealand Press Association) AUCKLAND. The unaudited group net profit of Allied Farmers Co-operative, Ltd, Auckland, fell 39.9 per cent to $484,759 in the year to June 30.

The directors have recommended a final tax-free dividend of 6 per cent out of the share premium reserve. This makes a steady 12 per cent dividend for the year.

The board of directors are proposing to make a cash issue of shares later this year to support the company’s Arabian ventures. The chairman (Mr D. L. Hazard) says in his annual review that farming has taken punishment and the company must accept its share of reverses. However, while the result was below the 1974 figures — which was below the 1973 record — profit before tax was ahead of 1972.

The downturn in export markets was offset by decisive action taken in the latter part of 1974 to reduce

staff and keep cost proportionate to earnings, says Mr Hazard.

“We are performing satisfactorily on a depressed market, and we are confident that we will improve earnings in this current year in spite of the inevitable downturn in non-primary producing sectors. “We will of course get some material help from the recent devaluation of the New Zealand dollar,” he said.

The major downturn in the company, was in the livestock department which suffered a 62.4 per cent cut in earnings directly caused by the 60 per cent drop in cattle prices. Mr Hazard said Allied Farmers had taken up contracts and commitments in the Middle East worth more than SUSSm. Allied Farmers had a contract to design and build for the Government of Bahrein a 3000 tonne. cold store worth SUSIm and an agreement with Bahrein to manage the cold store and develop trade in meat and other products. In addition, the company had a contract worth SUS36m with the Government of Oman to design and build a cold storage and fish processing complex at Muscat, and a contract worth $U5350,000 to manage it for one year.

In Kuwait, the company has a minority share in a trading company formed for the importation of meat, dairy produce, timber and other products. Allied Farmers has thp responsibility of providing management and expertise. .

“Apart from the initial export earnings from the construction and management contracts, which will be around SNZI.Sm the long term benefits in development of trade will be of major significance,” he said. The commitments by Allied Farmers follow the company taking a 51 per cent interest in a New Zealand company, Arabco Traders, Ltd. These have been taken up in the name of Arabco, or Allied Farmers, or jointly.