A lack of confidence in the New Zealand dairy sector, as well as the collapse in international wool prices, is a cause for concern for PGG Wrightson.
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New Zealand’s largest farm services provider PGG Wrightson has issued a cautious outlook for its 2016/17 financial year and forecast a decline in earnings (EBITDA) to a range of €41m to €45m. The group recorded earnings close to €46m last year.
In a first quarter trading update, Wrightson chief executive Mark Dewdney cited a lack of confidence in the New Zealand dairy sector, as well as the collapse in international wool prices, as a cause for concern for the company as it enters its busiest period.
While still very early in the season, Dewdney said that the trading environment for agricultural inputs and services in New Zealand had become “more difficult” compared with last year. Despite the increases in the GDT dairy index since August, Dewdney said there was a lack of confidence in the dairy sector at present with weather and commodity prices driving farmer uncertainty.
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Similarly for its wool business, the company said it was seeing significantly lower volumes of wool being traded due to the collapse in international wool prices due to a sharp reduction in Chinese demand.
The one bright spot for Wrightson was the New Zealand beef industry. New Zealand beef prices remain above the five-year average, while the current store cattle market remains “extremely strong”, according to Dewdney.
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New Zealand’s largest farm services provider PGG Wrightson has issued a cautious outlook for its 2016/17 financial year and forecast a decline in earnings (EBITDA) to a range of €41m to €45m. The group recorded earnings close to €46m last year.
In a first quarter trading update, Wrightson chief executive Mark Dewdney cited a lack of confidence in the New Zealand dairy sector, as well as the collapse in international wool prices, as a cause for concern for the company as it enters its busiest period.
While still very early in the season, Dewdney said that the trading environment for agricultural inputs and services in New Zealand had become “more difficult” compared with last year. Despite the increases in the GDT dairy index since August, Dewdney said there was a lack of confidence in the dairy sector at present with weather and commodity prices driving farmer uncertainty.
Similarly for its wool business, the company said it was seeing significantly lower volumes of wool being traded due to the collapse in international wool prices due to a sharp reduction in Chinese demand.
The one bright spot for Wrightson was the New Zealand beef industry. New Zealand beef prices remain above the five-year average, while the current store cattle market remains “extremely strong”, according to Dewdney.
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