KEY POINTS:
Meat processor Silver Fern Farms is expecting to turn last year's net loss into profit.
The Dunedin-based co-operative is forecasting net profit of at least $40 million for the year ending August 31, compared to a $40.3 million loss the previous year.
The company attributed the result to improved market conditions, currency depreciation, increased throughput and improved operating efficiencies.
Chief executive Keith Cooper said the result included an expected $40 million of non-recurring expenses from a restructuring programme.
Silver Fern has cut six sites and about 900 jobs, with some people moved within the company.
"It's an awfully strong performance but we've got to put that in perspective, there's not a great value if we're making money and our farmers are going out of sheep and beef farming," Cooper said.
"It's a good start but farmers have got to see the value coming through and this is a lot of what we're trying to do with the PGG Wrightson partnership proposal."
Meat & Wool New Zealand said sheep numbers dropped 11 per cent in the year ended June 30 to 34.2 million animals with the impact of drought and the expansion of dairying.
A Grant Samuel independent report into the proposed deal with PGG Wrightson forecast net profit of $48 million for 2008, followed by $30 million in 2009.
Silver Fern said a focus on strategic initiatives, best practice and operational excellence had reduced debt by between $80 million and $105 million, from a previous total of $208 million.
