A $500 million increase in revenue has helped Silver Fern Farms Ltd report an $86m increase in net profit after tax for the year to December 31 2022.
The meat company generated revenue of $3.273bn for the year (up from $2.749bn), which underpinned after-tax profit for the year of $189.3m, up from $103.8m.
Chief executive Simon Limmer said the year’s performance has confirmed the company’s market-led strategy is the right one and will create foundations for what he called the largest and most transformative investment programme in the company’s 75-year history.
“Silver Fern Farms is committed to becoming a trusted nature-positive producer.
“Last year we entered one of New Zealand’s largest sustainability-linked working capital facilities, and we are committed to putting tools in the hands of our farmers by taking a leading role in establishing the government-industry joint venture into agricultural emissions reductions,” he said.
Earnings before interest, tax, depreciation and amortisation, including a share of associate earnings, were $301.3m ($179.7m).
It will pay a fully imputed dividend for the year of $76.9m ($46.7m), which includes an interim dividend already paid of $31.9m.
Shareholders in SFF Ltd, the operating arm of the business, are SFF Co-operative and China-based Shanghai Maling.
Total livestock premiums paid for the year were $10.3m, up from $6.9m.
Limmer said the company’s performance will enable the largest capital investment programmes to date across all 14 processing sites.
“With $96m of capital investment in 2022, and even more planned in the next few years, we are doubling down on our commitment to meeting the needs of the end consumer by investing in our markets, infrastructure and organisational capability,” said Limmer.
SFF Co-operative reported a net profit of $94.1m ($51.5m).
It will receive a dividend of $38.45m ($23.4m) of which it will pay shareholders $33.5m ($18.4m).
This will be distributed through a fully imputed dividend of 23.2c/share payable to all ordinary and rebate shareholders. It includes a 10.1c/share interim dividend which has already been paid.
It will also pay a fully imputed patronage reward of 21.6c/share payable on qualifying shares to supplying shareholders based on supply during 2022.
The co-op will retain $5m in reserve.
Co-operative chair Rob Hewett said the accumulative dividend payments and patronage reward were the highest in the company’s history.
The result reflects the ongoing focus on the end consumer and ensuring that farmer suppliers share in the risk and reward of the operating company’s market performance.
“The first half of 2022 saw record returns for our farmer suppliers.
“The operating company’s ability to navigate risks in the market better than expected saw us proactively make over $21m of reward payments to suppliers over and above the record schedule pricing and other payments they received,” said Hewett.