Meat processor Alliance Group has reported a pre-tax profit of $7.9 million for the year ended September on the back of what it says are challenging sheepmeat markets.
The result is based on a turnover of $1.5 billion and compares to a pre-tax profit of $17.6 million last year.
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Alliance chief executive David Surveyor said the company's sheepmeat market in China declined by about 25 percent due to the economic slowdown, high in-market inventory in that country, and a strong domestic kill.
"It's been a year when global markets have had an impact on our business," Mr Surveyor said.
"As New Zealand's largest sheepmeat processor, it will come as no surprise that the volatility of the sheepmeat market in particular has had a pronounced effect on our profit result. With a high proportion of our business in sheepmeat, we have taken a bigger hit this year, however our beef business has had a strong year on the back of globally higher beef prices.
"Despite weakening overseas markets, Alliance Group made the difficult decision to keep taking lamb and sheep from our farmer-shareholders, therefore reducing their exposure to the volatile markets and limiting the impact of continuing dry conditions. The alternative of reducing our processing would not have been in line with our co-operative principles and would have adversely impacted our farmer-shareholders."