Landcorp raises earnings forecast after lift in dairy production

Landcorp has upgraded its earnings on the back of strong dairy production. Photo / Northern Advocate

Landcorp Farming has lifted its earnings forecast for the June year, due in part to higher milk production.

The state-owned entity, which has the Pāmu brand, said its earnings before interest, tax, depreciation and revaluations (Ebitdar) for the year would be in a $59 million and $64m range.

That compares with the previous forecast, issued in February, of between $45m and $50m.

"The change to forecast Ebitdar largely reflects growth in the dairy business as a result of both improvements in expected milk production and lifting value from Pāmu's portfolio of milk products," Landcorp said.

"Strengthening livestock business performance, the growing value of Pāmu's carbon portfolio and lower than expected operating costs have also contributed positively to the forecast result," the company said.

Factors impacting the lower operating expenses include higher than usual unfilled roles, reflecting the industry-wide labour scarcity, and tight control of maintenance and fuel expenses.

Last month, the country's biggest dairy company, Fonterra, said its New Zealand milk collection for the season ended May 31 was 1,539 million kg of milksolids, up 1.5 per cent on the prior season's.

Landcorp's final result will be released at the end of August.