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Jamie Mackay: The Country host on Landcorp reporting solid half year results · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk zed Be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: JB McKay, host of the Countries, with me, Hey, Jamie.
• 0:19
  Speaker 3: Go, I hear they're hard to believe it's four years.
• 0:22
  Speaker 4: I know it's nutty and we thought it would be
• 0:24
  Speaker 4: all over within about a weekend. So you know, credits
• 0:26
  Speaker 4: to the Ukrainians for holding those guys back.
• 0:29
  Speaker 2: So Land Corp looks like it's doing okay.
• 0:33
  Speaker 3: Yeah, well, depending on how cynical you want to be,
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  Speaker 3: and there are some cynical farmers out there saying with
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  Speaker 3: record prices, anyone would be doing okay. But to be
• 0:43
  Speaker 3: fair to Land Corp these days, known as PAMU, they
• 0:47
  Speaker 3: could be on track to hit their goal of a
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  Speaker 3: one hundred million dollar operating profit four years earlier than planned,
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  Speaker 3: because they'd hope to hit that by twenty thirty, and
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  Speaker 3: it looks like this year they might hit it because
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  Speaker 3: they're forecasting an increased annual profit of somewhere between ninety
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  Speaker 3: seven and one hundred and seven million. This would be
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  Speaker 3: a very good result, would be like about I was
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  Speaker 3: talking to the chief executive today, Mark Leslie. This would
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  Speaker 3: be like a five percent return on equity, which in
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  Speaker 3: any farming operation isn't too bad at all. And it's
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  Speaker 3: come off the back of productivity gains. That's good farming,
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  Speaker 3: and continued high commodity prices. Maybe that's good luck or
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  Speaker 3: good fortune. So in the six month period to December
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  Speaker 3: the thirty first, remembering that their financial year ends on
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  Speaker 3: June thirty, I've had an eleven percent increase in milk
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  Speaker 3: production off the back of only milking one point two
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  Speaker 3: percent more cows. That's a very good result. Livestock revenue
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  Speaker 3: has lifted from fifty million from fifty million last year
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  Speaker 3: to seventy one million this year. Forty million was beef,
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  Speaker 3: twenty four million was sheep. That's only a half year result.
• 2:01
  Speaker 3: A lot of that income will come in on the
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  Speaker 3: second half of the year, and these numbers do not
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  Speaker 3: include These numbers were done before Fonterra announced an increase
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  Speaker 3: in the farm gate forecast milk price last week to
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  Speaker 3: a midpoint of nine dollars fifty So all in all,
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  Speaker 3: heather good results for Parmu. But you do have to
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  Speaker 3: ask the question, in these tough times, should we be
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  Speaker 3: farming a two billion dollar asset or should we be
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  Speaker 3: used salad and use that money to build hospital, schools
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  Speaker 3: and roads.
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  Speaker 4: Yeah, well, I mean I think that's it feels very
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  Speaker 4: much like PAMU was being lined up for sale, possibly
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  Speaker 4: after the next election. But look, what I want to
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  Speaker 4: understand here is obviously the commodity prices have helped its books.
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  Speaker 4: Can we sheet any of this back to same and
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  Speaker 4: Brown sending them letters and saying, listen, you need to
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  Speaker 4: start running the show properly.
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  Speaker 3: I think you can because previous Palmu or Land Court
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  Speaker 3: management probably I'm not saying they lost their way, but
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  Speaker 3: the guy marked Leslie, to be fair to him, seems
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  Speaker 3: to be pretty focused. They've con almost sort of meat
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  Speaker 3: and taties back to basics. They've had the message hard
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  Speaker 3: and fast that they've got to return a meaningful dividend
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  Speaker 3: to the government. You know, they've got one hundred million
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  Speaker 3: dollar profit. That's fine and dandy. They will repay some
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  Speaker 3: debt with that, they will reinvest some, but the government
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  Speaker 3: gets a diffidend. I think last year they divd just
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  Speaker 3: off the top of my head, Heather, it was something
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  Speaker 3: like fifteen million dollars. It's obviously going to be better
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  Speaker 3: than that. But if you've got a two billion dollar
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  Speaker 3: asset and your netting a dividend to the government of
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  Speaker 3: fifteen million. I'm not saying that's the case this year.
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  Speaker 3: I don't know what the dividend will be. That is
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  Speaker 3: not a very good return on investment.
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  Speaker 2: I would agree with you. Now, what's Beef and Lamb's
• 3:44
  Speaker 2: problem with the RMA replacement legislation.
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  Speaker 3: Well, strangely Beef and Lamb and Groundswell are agreeing on
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  Speaker 3: this one, and I think dairy en z and fed
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  Speaker 3: farmers aren't a mile away either. Look what they're saying
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  Speaker 3: with the RAMA reforms is they like them. They like
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  Speaker 3: the intent, they just don't like the wording. Kate Ackland,
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  Speaker 3: chair of Beef and Lamb New Zealand, saying we welcome
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  Speaker 3: the intent. However, the way the legislation is currently written,
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  Speaker 3: it's missing the mark and farmers could be worse off.
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  Speaker 3: And they're worried about more onerous requirements on permitted activities,
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  Speaker 3: significant issues around fresh water plans and just consenting things
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  Speaker 3: that should be given in farming. We've got the ridiculous
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  Speaker 3: situation where some farmers cannot get set consented or have
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  Speaker 3: potentially cannot get consented enough water for their stock to drink. Well.
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  Speaker 3: You know, that's a rather dumb situation to be and
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  Speaker 3: you need to have a consent so that your stock
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  Speaker 3: can drink all the water they need so they can
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  Speaker 3: you know, go on and produce well. So those are
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  Speaker 3: some of the issues. Look, the submissions closed on February thirteenth.
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  Speaker 3: I think Beef and Lamb got an extension for a week.
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  Speaker 3: But all those industry good bodies, Beef and Lamb, dreian Z,
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  Speaker 3: Federated Farmers, ground Sweller chipping in from the side, They're
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  Speaker 3: all going through the submission process. So I'm hoping that
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  Speaker 3: the intent from the current current government will see sanity prevail.
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  Speaker 3: But I don't hold my breath on that one either.
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  Speaker 2: He's hoping. Jamie, Hey, thank you very much. Appreciate it, mate,
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  Speaker 2: look after yourself. Jamie Mackay hosts of the Country.
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