Leaner Affco bounces back into black

By LIAM DANN

Trimming the fat on its corporate structure has paid off for meat company Affco Holdings, which announced a return to profit in its half-year result yesterday.

Affco made a profit of $10.8 million for the half-year to March 29 compared with a loss of $14.7 million for the same period last year. But the rise in the New Zealand dollar has limited the gains for the company.

Operating revenue totalled $446.1 million, down $50.7 million on the same period last year.

This was wholly attributable to strengthening of the dollar, finance manager Robert Gerrie said.

Despite the drop in revenue there had been a strong increase in the volume of product sold, he said.

After a run of poor results the Affco board undertook a restructuring programme last year, described as a "back to basics" approach by chairman Sam Lewis.

The company moved its head office from central Auckland to rural Horotiu. Nearly half of its corporate staff were cut.

Chief executive Tony Egan said additional capital expenditure at its processing plants had further increased efficiencies.

The upgrades included the introduction of hot boning. This speeds up processing as carcasses do not need overnight chilling before deboning.

The company continued to strengthen its balance sheet by reducing term debt with a net $15 million repayment last December.