Government expects Pāmu to improve returns after half-year $3m profit

The government is not impressed with state-owned farming company Pāmu and is set to lay out expectations for the coming year.

Minister for State Owned Enterprises Paul Goldsmith recently met with Pamu, also known as Landcorp, and told the executive he was unhappy with the company's performance.

Last month Pāmu, which has 110 farms around the country, reported a half-year profit of $3 million - a drop from the $15m profit for the same time last year.

Goldsmith said he expected all state-owned enterprises to operate as successful businesses, and to be as profitable and efficient as comparable businesses in the private sector.

"I am not yet satisfied that Pāmu is achieving this, and I expect it to take steps to improve its performance and the returns it provides to the Crown. I will be writing to Pāmu with my expectations for the coming year.

"I have met with Pāmu to discuss the company's opportunities and challenges, and expect to engage regularly with the company going forward. "

Pāmu chief executive Mark Leslie said the conversation with Goldsmith was constructive and was focused on driving performance and increasing revenue.

"We've got some opportunities that exist around continuing to drive farm performance and like all farmers, we've been really focused on those, whether it's pasture management, whether it's reducing stock wastage or whether it's reproductive performance.

"We also talked through the challenges that all agriculture is facing at the moment with the cost squeeze and then returns."

Leslie said it was also a good opportunity to talk about the clean-up on some of Pāmu's farms from Cyclone Gabrielle and the costs associated with that.

He said despite the smaller half year profit Pāmu was forecasting a full year profit of between $9m and $19m.