Silver Fern Farms says profit wiped out in 2016

Silver Fern Farms chairman Rob Hewett (right) and chief executive Dean Hamilton. Photo / Otago Daily Times

Silver Fern Farms, the country's largest meat processor, has warned farmer shareholders that it now expects to only break-even in the current financial year, down from a pre-tax profit of $27.16 million in the previous year.

It had earlier warned in April that profits would be "materially below" 2015. Silver Fern Farms' financial year runs to the end of September.

The Dunedin-based meat company has agreed to sell a controlling stake to China's Shanghai Maling Aquarius, but the deal is still being considered by the Overseas Investment Office.

An earlier deadline of June 30 has passed, but a new deadline of September 30 is now in place to secure OIO approval.

Shareholders backed the sale by 82 per cent, but a special shareholder meeting has been called for August 12 by sale opponents although SFF management says its outcome is not binding and cannot undo the previous vote.

In its winter newsletter, chairman Rob Hewett and acting chief executive Dean Hamilton describe the profit slump as "disappointing" and blame, "lower national volumes and lower margins (exacerbated recently by the NZ dollar strength)".

For the nine months to the end of June, beef processed was down 4 per cent compared to the same period a year earlier, sheep was down 3 per cent and venison fell 17 per cent.

Hewett and Hamilton also warn that the decision by British voters to exit the European Union in a referendum last month "has had a meaningful negative impact on NZ returns, in particular for lamb" largely due to the vote's impact on the British pound and Euro currency.