Allied Pine, rescued by Allied Farmers Group from receivership two years ago, has turned around to bite the company.
Allied today announced a group net profit of $3.2 million, 8 per cent up on the previous period ($2.9m).
However, profits before tax fell from the previous year's $4.5m to $3.5mthis year, mostly due to losses at Allied Pine.
Losses from the timber company allowed Allied Farmers to cut its tax bill by 76 per cent from $1.6m to $388,000, resulting in the bottom line improvement in 2005.
The company had warned in June that its profit will be down for the year, in part because of losses in its timber business.
Chairman Brian Train said the Allied Pine result had been exacerbated by the high New Zealand dollar, and a downturn in demand for building timber in Australia.
Allied Farmers bought timber miller NDG Pine for an undisclosed price 18 months ago and renamed it Allied Pine.
The Wanganui timber mill fell into receivership on June 27, 2003, laying off more than 70 staff and blaming the Iraq war for a massive downturn in world markets, especially the United States.
Allied Farmers said a final dividend of 5cps will be paid on September 30. The company also announced a special dividend of 5cps, bringing the fully imputed dividend per share to 15c.
Philip Anstey, rural services manager, said the company had a mix of excellent and satisfactory results in the Agricultural Services division.
Real Estate had an exceptional year, and Livestock another very good year, all but matching last year's exceptional result, he said.
"Fewer export sales were the only disappointment."
Allied Farmers Wools also suffered.
Although bale numbers increased, the trading environment limited opportunities, and maintenance costs contributed to a reduced result.
Mr Train said the market had been more favourable this year.
"Commodity prices world wide, for meat and milk products are assisting to temper the impact of the high exchange rate," he said.
Shares in Allied Farmers were unchanged at $2.46 this afternoon, having ranged between $1.84 and $3.25 in the past year.
