Affco continues its bad run with $4.8m deficit

By Philippa Stevenson

Meat company Affco continued a run of reported losses when it announced a $4.8 million interim half year after tax deficit yesterday. For the same period ended March last year the company recorded an $8.9 million loss, and for the full year to September a deficit of $73 million.

Chief executive Ross Townshend blamed the latest loss on high stock procurement prices but continued to forecast a modest profit at year's end. Procurement prices were considerably ahead of returns available from the company's international markets, he said.

Mr Townshend said the message would be unpopular with farmers, particularly as many were themselves struggling. "But we can't keep going as an industry with such margins. People want strong meat companies but companies have to have strong profits to reinvest."

He said the predicted turnaround in the company's balance sheet this year would result from the flow through effects of a restructuring programme which involved 19 cost saving and efficiency projects. The effect of livestock freight restructuring which slashed carriers from 196 to 17 with a yearly saving of more than $3 million, and export freight rationalisation with an annual benefit of $7 million, would be shown in full in the end of year result.