Thursday, April 25, 2024

Tatua holds its leading results

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Tatua’s record year for revenue, earnings and milk payout to farmers came from solid across-the-board performances in all aspects of the co-operative’s processing and sales, chief executive Brendhan Greaney says.
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Tatua's record year for revenue, earnings and milk payout to farmers came from solid across-the-board performances in all aspects of the co-operative’s processing and sales, chief executive Brendhan Greaney says.

Revenue from added value products was slightly ahead of the previous year, while the same volume of milk was made into ingredients – caseinates, whey proteins and anhydrous milk fat.

Export revenue was impacted by the stronger value of the New Zealand dollar, but he says this effect was offset by the positive result from currency hedging.

Tatua’s 107 supply farms produced 15.65 million kg milksolids, 3.3% higher than in the 2020 season and the second-largest on record.

“We are not encouraging more milk production because we can handle the present volume and we retain a little bit of headroom at the spring peak,” Greaney said.

“Nor are we steering our farmers towards milk composition changes – all milk is high-quality and it is what we do in the plant which adds value.”

His five years as chief executive have seen steady financial increases in earnings, from $7.60 to $10.43/kg, and in payout, from $7.10 up to $9.25.

Last season’s payout to farmers was a fairly consistent $1.50 ahead of Fonterra.

For the past three years the directors have decided to retain more than $1 of the annual earnings for reinvestment in the company and paying down debt from 35% to 20% gearing.

Greaney says smaller plant improvements were planned in the current year after $15 million was recently spent on wastewater treatment at Tatuanui, the completion of which was delayed by covid-19 disruptions.

Shipping delays and vessel repositioning were a constant challenge for the international trade team.

“We acknowledge that many businesses and individuals have faced greater hardships and that we are fortunate to have been able to continue to operate as we have,” he said.

“We remain a very well diversified business in the range of products, the countries we export to and our customer base.

“The business has grown in China but we are not overly exposed to any one market.”

Milk collection started strongly during winter but has fallen back slightly in September.

Production is going well and Tatua is well contracted out ahead.

Over half of Tatua’s farms now have environment plans and all will have one by the end of next season.

The most recent sale of a Tatua supply farm saw 50ha plus buildings make an extraordinary $5.95m, or $120,000/ha.

On a $80/kg MS basis that would be twice the valuations of comparable farms elsewhere in Waikato.

Greaney says Tatua supply shares have a nominal value of $5/kg plus an undisclosed milk supply entitlement traded price between farmers.

The price for the farm that changed hands recently included shares and entitlements for 75,000kg/year.

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