Poor weather knocks meat company profits

By PHILIPPA STEVENSON

The North Island's two major meat companies have confirmed that the summer's poor weather has hit profits.

Yesterday, Affco and Richmond, soon to report half-year results to March 31, said their performance would be below expectations.

Affco, which holds its annual meeting in Auckland today, said an unseasonally wet spring and summer had encouraged farmers to hold on to stock, and farm gate prices had risen as a result of buying competition.

Chairman Sam Lewis said the company had not become involved in a price war.

"There will be some reflection of this in our trading performance for the period," he said.

Chief financial officer Andrew Titter said yesterday that variability in livestock flows was likely to continue to the end of the interim period.

In November, Affco said it expected a full-year net profit of $14.1 million.

Yesterday, Mr Lewis said more normal livestock flows from now to the end of the season should help deliver close to the forecast.

Richmond chief executive John Loughlin said his company had signalled the impact of the wet weather at its December annual meeting.

The company was confident of a very good full-year result, he said.

"The first-half will be down on the previous year, and the second half will be outstanding.

"The split between the first-half and second half-year profit is not necessarily a good indicator of where you are going to finish."