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Source: ONE News -
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Rural services company PGG Wrightson has revised down its earnings forecast due to the impact of the global recession on the rural sector and a slow down in dairy activity.
The company says its net operating earnings guidance for the year ended June 30 is likely to be in the range of $30-$32 million compared with its previous guidance of $36-$42 million.
PGG Wrightson reported strong operating result in the first half of the year but says earnings are heavily weighted towards the second half of the year, during which time local and international market conditions have become tougher as the recession deepens.
"While the international agricultural sector outlook overall remains robust, the ongoing global recession and Fonterra's recent announcement regarding its reduced payout are dampening farmer confidence restricting spending in the autumn season," the company says.
"This has been compounded this year by the impact of Fonterra's requirement for farmers to 'share up' resulting in discretionary production being artificially curtailed."
While dairy had been hit, the company says sheep and beef farm incomes have improved to their best levels in recent years.
PGG Wrightson shares closed on Tuesday at $1.20.
