Alliance recorded a net profit before tax of $24.6m on revenue of $2.1 billion for the year ending September 30, compared with a net loss of $120.8m on revenue of $1.8b the previous year.
In a statement, chairman Mark Wynne said the result represented a “major milestone” in the company’s reset as it looked forward to its joint venture partnership with Dawn Meats.
“After two very challenging seasons, it’s pleasing to return to profit. This result reflects the hard decisions we’ve made as part of our ruthless back-to-basics strategy.
“We have also worked hard to reduce our reliance on sheepmeat by strengthening our beef capabilities, diversified our market mix and enhanced transparency with our farmer-shareholders.”
Last month, the company’s farmer shareholders voted in favour of selling the 65% stake to Dawn Meats for $270m. That transaction is due to be completed in mid-December.
Alliance had a deadline of December 19 to repay $188m of bank debt. The board had previously said if the Dawn deal was not supported, it would have to enter into a process led by its banking syndicate which might involve possible asset sales, site closures and further cost-reduction moves.
Mr Wynne said the deal would further strengthen Alliance’s financial position and long-term competitiveness.
Alliance had since adopted a disciplined, back-to-basics approach that focused on creating greater market value, returned more value to farmers and drove greater enterprise efficiency.
“Over the past 12 months, Alliance has strengthened its financial position by reducing costs and optimising processing capacity. We have enhanced farmer offerings, invested in smarter technology, reduced inventory levels by around half compared with the same time last year and improved sales velocity,” Mr Wynne said.
“For the first time in many years, the company also funded capital expenditure on fixed assets directly from free cash flow.”
The company’s annual report showed one employee was paid just over $2m while five employees were paid between $520,000 and $930,000. There were 852 employees who received remuneration including benefits of $100,000 or more.
Meanwhile, data released by Stats NZ yesterday showed New Zealand’s total meat exports in the year ended October reached $10b for the first time.
International accounts spokeswoman Viki Ward said the previous high was $9.9b in the year ended November, 2022.
The rise was led by an increase in sheep meat exports, up $951m, and beef, up $625m.
The United States was the leading beef export market while the EU was the leading market for sheep meat.
