The record forecast payout to dairy farmers has helped boost revenue at animal and farm improvement company LIC.
Revenue for the six months ending November 30 at the NZX-listed co-operative was $89.5 million, up from $77.5 million the previous year.
Chairman Stuart Bay said a buoyant winter andspring of 2007 was as much a result of forecast payout as favourable growing conditions around the country.
Fonterra said this season's payout would be at least $7 per kg of milksolids, compared with $4.46 the previous season.
"This saw farmers invest in their farming and herd infrastructure with increases in expenditure across the range of LIC products and services," Bay said.
Record sales included artificial breeding, herd recording and farm automation products.
Chief executive Mark Dewdney said the drought was affecting the company in the Waikato, Taranaki and some areas of Wairarapa, where farmers had dried off herds. "That'll have an impact on our performance this year but we will still have a good solid result," Dewdney said.
International markets in Ireland and the United Kingdom had suffered a setback following EU requirements on imported semen, while a drought in Australia had affected sales of genetics products.
The EU banned semen from vaccinated bulls a couple of years ago but LIC had enough stock in the United Kingdom to meet demands this year, Dewdney said.
"We now have bulls that are not vaccinated for IBR and we're just in the process of re-establishing a new stud here which we expect will enable us to send fresh semen to the market in time for the 2009 season," he said.
Net profit was $19.1 million, down from $20.2 million the previous year, with tax payments up 154 per cent at $9.4 million.
The tax expense had increased substantially on the previous year because LIC no longer had tax losses available, while the pre-tax level surplus was up 15.1 per cent at $28.5 million, the company said.
