PGG Wrightson chief executive Mark Dewdney. Photo / Sarah Ivey
PGG Wrightson expects operating earnings to decline this year, snapping three years of growth, amid weakness in some of the key agricultural commodity markets it has exposure to.
Operating earnings before interest, tax, depreciation and amortisation are expected to be between $62 million and $68 million in the year to
June 30, 2017, down from $70.2 million the year earlier, the Christchurch-based company said in a presentation prepared for its annual meeting today.
Net profit after tax is expected to be broadly in line with the 2016 financial year of $39.6 million, it said.
Earnings at the rural services firm are closely aligned to the fortunes of the rural sector, where farmers rein in spending during periods of low commodity prices.
Confidence in the dairy sector remains a headwind this year and dairy farmers receiving a higher milk payout are likely to prioritise debt reduction, wool trading volumes are down due to lower international prices and reduced Chinese demand, and international prices for red meat have weakened, the company said today.
