Government agribusiness Landcorp estimates its net operating profit took a $16.6 million hit from drought last summer and autumn in its 2007/08 financial year result.
The state-owned enterprise, which operates 111 properties on 372,259ha, said it made a net operating profit for this year of $11 million, comparedwith $14.9 million the year before.
Chief executive Chris Kelly said the decline was driven by increased interest charges and costs and decreased revenue, primarily as a result of the severe drought.
Net operating profit, which excluded revaluations, was a more accurate indicator of performance than net profit after tax (Npat), which included stock revaluations.
In the latest year Npat was $58.6 million, compared with $16.5 million the previous year, with the main stock revaluations being in the value of dairy cows.
The latest year was the first full year of reporting under new international accounting standards.
The 2007/08 Npat figure also included a one-off profit of $26.2 million from selling areas of farmland that were outside Landcorp's strategic requirements.
With support from that one-off profit, Landcorp said it would pay a dividend to the Crown of $13 million, up from $12 million the year before.
Chairman Jim Sutton said Landcorp's strategies for diversification into dairying and deer, for the clustering of farms, and for further gains in productivity had achieved positive results.
Growth in dairy and deer revenues partially offset the drought's impact on the company, with total revenue increasing 13 per cent to $164 million in 2007/08.
Landcorp's total shareholder return for the year was $275.9 million or 21.1 per cent, a combination of net operating profit and growth in the value of the company's assets.
Total assets increased 19.6 per cent from June 2007 to June 2008 mainly due to growth in the value of farm assets, particularly the value of dairy farming and support land.
