RURAL REPORTERS

Last updated17:43, February 9 2017

ANDY JACKSON

LIC has lifted profits in its half year result.

Tough cost-cutting has helpedLivestock Improvement Corporation boostitsprofit after tax by 21 per cent in the latest half year result.

The rise to $19.3 million reflectedthe Hamilton-based animal genetics company's solid performance in artificial breeding and herd testing, chairman Murray King said.

LIC's total revenue for the six months endingNovember 30, 2016was $131m, 9.6 per cent down on the $145m achieved during the same period in 2015.

King said it reflected tough but necessary cost reduction measures within the business. It had been a tough environment on farms for the past couple of years and LIC had weathered the storm and was in good shape to face the challenges ahead.

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While the downturn had reduced the national dairy herd the genetics LIC selected and supplied to farmers were responsible for breeding more than three-quarters of all cows, with sales similar to those achieved last year, resulting in an increased market share.

Demand for LIC's herd testing services had rebounded, with sales up on the same time last year. LIC had continued its transformation programme to protect and grow the co-operative, he said.

"We've scrutinised every part of the business to actively manage and minimise our operating costs, and look for better ways of doing business, with minimal impact to farmers or where possible improving it. This focus will continue through the rest of the year and beyond."

LIC's business, particularly for artificial breeding washighly seasonal. Itshalf year results provide most of artificial breedingrevenues but not a similar proportion of total costs, and are therefore not indicative of the second half, nor the full year, result. No dividend is therefore declared at half year.

The business wasforecasting a return to a modest level of profitability for the full year.

-Stuff

Excerpt from:
Animal genetics co-op LIC reports a 21 per cent profit lift in half year result - Stuff.co.nz