Livestock Improvement Corporation Limited announced unaudited earnings results for the six months ended November 30, 2017. For the period, the company reported revenue of NZD 151,479,000 against NZD 130,326,000 a year ago. Earnings before finance activities, taxation and fair value adjustments - Bull Team were NZD 22,486,000 against NZD 28,333,000 a year ago. Profit before taxation was NZD 21,602,000 against NZD 26,941,000 a year ago. Profit for the period was NZD 15,067,000 against NZD 19,295,000 a year ago. Profit attributable to owners of the company was NZD 14,854,000 against NZD 19,018,000 a year ago. Basic and diluted earnings per investment share were NZD 0.510 against NZD 0.653 a year ago. Underlying net earnings excluding fair value adjustments - Bull Team and tax thereon was NZD 15,067,000 against NZD 19,295,000 a year ago. Net cash from operating activities was NZD 5,408,000 against net cash used in operating activities of NZD 433,000 a year ago. This is reflective of the increased sales and the seasonal nature of LIC's business, particularly artificial breeding (AB). Cash applied to acquisition of intangibles was NZD 11,888,000 against NZD 5,831,000 a year ago. Acquisition of fixed assets was NZD 4,240,000 against NZD 212,000 a year ago. As at 30 November 2017 net tangible assets per investment share were NZD 5.90 against NZD 5.22 a year ago. Earnings before interest, tax, depreciation and amortisation (EBITDA) excluding one-off transformation costs was NZD 57.5 million, up 36.6% on the same period last year. Reported EBITDA was NZD 36.8 million was 12.6% down on the same period last year. Earnings before interest and tax excluding one-off transformation costs were NZD 43.2 million, up 52.3% on last year.

Underlying Earnings (NPAT excluding bull valuation) at year-end are forecast to be in line with the 2016-2017 result of NZD 3 million despite LIC incurring and accounting for approximately NZD 15 million of one-off transformation costs on an after tax-basis within Underlying Earnings. The increased revenue position was driven by the success of the transformation programme, but this has also translated in reported EBIT being lower as it includes the one-off implementation costs of the programme. These costs will not be incurred in second half or years ahead, so a stronger reported EBITDA and reported EBIT is expected next financial year.

With ongoing and recurring benefits from the transformation programme and no further one-off costs to be incurred, LIC expects underlying earnings for the 2018-2019 year to be in the range of NZD 18 million - NZD 26 million, assuming no significant climate event or milk price drop takes place between now and then.