Rural services firm PGG Wrightson has revised down its operating earnings guidance for the current June year due to deteriorating market conditions.
The company now expects its operating earnings before interest, tax, depreciation and amortisation (Ebitda) to be around $43 million for the year, down from a previous guidance of $50m. The new guidance compares with PGG Wrightson’s Ebitda of $61.2m for the June 2023 year.
“Since releasing our half-year results in February, trading conditions have deteriorated because of market conditions that are impacting the whole of the agricultural sector,” PGG Wrightson chairman Garry Moore said.
PGG Wrightson said the factors restraining spending patterns in the rural sector included:
- Drought conditions with soil moisture deficits against historic averages across much of the East Coast, Tasman and Northland over the first quarter of 2024.
- Weak sheep meat demand from China and increased supply culminating in lower farmgate returns.
- Interest rates and input costs remain elevated, impacting on-farm and on-orchard profitability with clients looking to reduce debt and defer spend.