Tegel Group, New Zealand's biggest poultry producer, said full-year profit may drop by as much as a fifth because of slower progress in Australia and one-time costs ranging from compliance rule changes to restructuring and disruptions to its New Plymouth processing plant.
Chief executive Phil Hand said underlying earnings before interest, tax, depreciation and amortisation, excluding one-time costs, is expected to be in a range of $70 million to $72m in the 2018 financial year from $72m in 2017. Net profit would be in a range of $25m to $27m, down from $31.7m last year.
At the time of its first-half results in December, the company had said it was working "towards exceeding FY17 underlying ebitda", aiming to maintain domestic market share "in a challenging pricing environment." Profit fell 2.3 per cent in the first half as higher expenses offset the benefits of increased sales.
The Auckland-based company gave a market update in February, saying one-time costs could erase as much as $2m from full-year net profit because of damage to the New Plymouth plant from ex-cyclone Gita and an ammonia leak. Today it said pre-tax one-time costs were expected to be between $8m and $10m.
"The recent one-off events have proved challenging for the business, however, despite these challenges, the impact on our customers has been minimised as a result of our business strategy of running three independent fully integrated sites," Hand said.