PGG Wrightson, whose chief executive yesterday signalled his departure at the end of the year, warned a wet autumn sapped the performance of its seed and grain business and will weigh on annual earnings.
The Christchurch-based company said it expects operating earnings before interest, tax, depreciation and amortisation to be in the bottom half of its earlier guidance for earnings of between $62 million and $68m, while net profit will be near the low end of its previous forecast for between $46m and $51m. The rural services firm reported ebitda of $70.2m in the year ended June 30, 2016, for a net profit of $39.6m.
Wrightson profit stalled in the first half as low prices for dairy and wool and reduced red meat production made farmers more cautious about spending, but the company had been more upbeat about the second half.
Wrightson had been tracking ahead of forecast before autumn, but the wet month of April made crops difficult to harvest and paddocks challenging to work, which has weighed most heavily on the seed and grain division.
"For our grain business, lower harvest yields have reduced earnings from our processing and drying facilities," chief executive Mark Dewdney said in a statement. "For seed, autumn demand for our seed products has been less than expected as many farmers have simply been unable to complete their re-grassing and autumn pasture renewal plans."
