Silver Fern Farms declares $12.4 million dividend after paying back wage subsidy

The dividend comes after the company paid back its $43.3 million COVID-19 wage subsidy.
The dividend comes after the company paid back its $43.3 million COVID-19 wage subsidy. Photo credit: Getty

Silver Fern Farms has declared a $12.4 million dividend to its shareholder cooperative.

The dividend comes after the company paid back its $43.3 million COVID-19 wage subsidy.

The subsidy payout caused controversy at the time as Silver Fern Farms, the country's largest red meat company, was deemed an essential service and allowed to keep operating during the nationwide lockdown.

The dividend was generated from the 2019 financial year, and followed the company's April announcement of a net profit of $70.7 million after tax.

"While the world is still dealing with the COVID-19 pandemic, and there remain risks of disruptions to the supply chain, over the past quarter we have managed to export our food to customers who are willing to pay for safe, trusted and sustainably produced food from New Zealand," said Rob Hewett, Silver Fern Farms co-chair. 

"We were also able to fully repay the Government wage subsidy at the end of May, retain our 7000 staff and provide solid farm-gate returns across most stock classes – a result we did not foresee at the start of COVID disruption.

"This strong performance alleviated the cash-flow risks to the business through our peak operational season – which was the basis for the two shareholders to request a deferral of the 2019 dividend in April."

Cooperative chair Richard Young said an earlier decision to defer the dividend due to global uncertainty was "the right decision at the time".

He also said the cooperative would retain $4.5 million of the dividend in order to "build cash reserves", paying out the remaining $7.9 million to shareholders. 

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