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Livestock Improvement lifts in first-half

NZN 9/02/2017 Tina Morrison

Livestock Improvement Corp, the dairy herd genetics cooperative, has lifted first-half earnings as it focused on cost cutting, and forecast a return to profit for the full year.

Net profit increased 21 per cent to $19.3 million in the six months ended November 30, 2016, from $15.9m a year earlier, the Hamilton-based company says in a statement.

It forecast a return to a "modest level of profitability" for the full year, after posting a $4m loss last year.

Livestock Improvement's fortunes are closely linked to the farmers they serve and a slump in milk prices had seen dairy farmers reduce spending on its services, hurting the business.

Chairman Murray King says it had been a "tough environment" the past few years, although the company had weathered the storm.

"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 farms or where possible improving it," Mr King said.

Livestock Improvement's revenue from ordinary activities fell 8.7 per cent to $130.3m. The company won't pay a first-half dividend.

LIC's non-voting investment shares, which are listed on the NZAX, last traded at $2.56 and have dropped by a third the past year. The investment shares are restricted to dairy farmers holding cooperative shares with voting rights and LIC employees.

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