The New Zealand State-Owned Farmer Sets a “Bold” Profit Target for 2030, Driven by a Laser Focus on Core Farming and On-Farm Productivity.
Pāmu, New Zealand’s state-owned farming operation, has set a “bold” forecast of reaching more than $100 million in net operating profit by 2030. This ambitious target would more than double its recent $49 million operating profit, which itself represented a remarkable 145% leap compared to the previous year. This significant turnaround comes after a period of poor performance that drew criticism from the government, making the new goal a direct response to pressure for improved financial results.
The company’s positive financial performance for the year was underpinned by significantly improved farmgate returns. Its total income surged by 23.4% to $348 million, with net profit after tax soaring over 560% to $120 million. This jump was largely due to a one-off $96 million revaluation of its animals and forestry assets. However, Pāmu’s CEO Mark Leslie emphasizes that operating profit, which strips out these non-recurring gains, is the truer measure of the company’s core farming performance.
Revenue from milk increased by $32 million, a gain driven by a higher farmgate price that successfully offset a 1.4% decrease in milk production caused by weather events. The company’s dairy farms supply major processors like Fonterra, Miraka, and Synlait, and 20% of its milk is organic, commanding a premium price. Additionally, livestock revenue saw a strong increase of $36 million to $152 million, boosted by a 20% uplift in on-farm production and favorable commodity prices.
Central to Pāmu’s strategy is a relentless focus on on-farm productivity. The article highlights several key metrics that are a testament to this approach, including a 71% six-week-in-calf rate, which is above the industry average. The company’s lambing percentage was also higher than the industry forecast, and it has successfully increased the number of calves reared, with a goal of reaching 100% by 2030. By focusing on what it can control, Pāmu is aiming for sustainable profitability that is less reliant on volatile commodity prices.
The new forecast is a direct answer to recent government criticism regarding Pāmu’s past performance and its failure to meet its cost of equity. Pāmu’s leadership acknowledges the government’s clear expectations and sees the profit target as a supportive and focused goal. By concentrating on its core agribusiness operations and delivering tangible results, Pāmu is positioning itself to not only meet its financial targets but also to provide a $15 million dividend to the Crown in 2026.
Source: BusinessDesk, “Pāmu gets ‘bold’ with $100m profit target”
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