Tegal results: non-repeating costs affect net profits in ‘demanding year’
Described as a “demanding year” by Tegal CEO Phil Hand, the group reported net profit after tax of NZ$26.1m, a decline from $34.2m, which it ascribed to non-repeating costs.
The company added that its net profit after tax was down 23.8% for the statutory 53 weeks comparative period and 17.7% below the 52-week comparative period.
A decline in exports also hampered its underlying EBITDA results, which were down by $1.8m compared to the previous period.
However, Tegal said its net profit after tax and underlying EDITDA were within the company’s updated earnings guidance.
While the company delivered another year of record poultry volumes and revenue, the result was also affected by non-repeating costs of approximately $9.9 million before tax. These came mainly from industry compliance, cyclone Gita and organisational restructuring.
During the 52 weeks, the company distributed 99,908 tonnes of poultry volume and saw its revenue reach $615.4m, up 2% compared to its full-year financial results for 2017.
“While it is pleasing to be able to deliver results within our forecast range, there is no doubt that it has been a demanding year on several fronts,” said Hand. “We have stayed focused on delivering a strong operational performance, and our increased volumes and revenue reflect this. Tegal has a very strong domestic position, and we are determined to achieve strategic and sustainable export growth.”
The business is currently the target of a full takeover bid by Bounty Holdings New Zealand, a subsidiary of Philippines-based Bounty Fresh Foods, which was submitted on the 28 May.
The offer from Bounty Fresh Foods remains subject to a number of conditions and whether the Philippines poultry firm receives approval from New Zealand’s government agency Overseas Investment Office.
Bounty Fresh Foods has until 28 August to comply with the conditions unless there is an extension from the Takeovers Code, an independent body designed to supervise and regulate takeovers.
