LIC has reported a steady increase in revenue and a confirmed earnings guidance in its first-half interim results for the 2023 financial year.
Revenue is up 4.6% at $177.2 million but net profit after tax is down 6.4% to $33.3m, compared with the corresponding period in the previous financial year.
The earnings guidance range for the full financial year has been tightened slightly to $21.5-$25.5m (previously $20-$26m). Those results will be declared in July.
The directors have also published an early guidance for the 2023-24 financial year of $22-$28m.
Chair Murray King said the 2023 half-year figures are pleasing given the challenging conditions, especially cost pressures.
“Like many other businesses we have been challenged during this time by staff shortages, a weaker Kiwi dollar and rising costs associated with record inflation.
“But we are pleased to confirm we remain on track to achieve a strong result at year-end and keep up the positive momentum from our previous years’ performance.”
He said increased revenue was driven by uptake of the co-op’s premium bull genetics and animal health tests, which reflects growing commitment from farmers to breed the best cows, faster.
Recent research found that long-term users of LIC genetics almost doubled the speed of improvement in their herds over the past decade, whereas those who did not use LIC genetics had lower rates of gain.
King said the co-op’s prolonged and substantial investment in genomics has been the key contributor of this improvement as the technology enables accurate identification of elite bulls at a younger age so they can be made available to farmers earlier and fast-track the rate of genetic gain on farm.
In the 2022 financial year the NPAT was $26.7m and in the first half of that year it was $35.6m.
LIC’s first-half result incorporates the majority of revenues from LIC’s core artificial breeding and herd testing services.
But it does not contain a similar proportion of total costs so is not indicative of the second half, nor the full-year result.
