Originally posted September 4, 2015
SAF has delivered a $4.7 million full year profit in addition to capital growth for its superannuation investors in FY2015.
Explaining the results to Australian Financial Review’s Matthew Cranston, Martin Newnham said: “Excellent farming practices capitalising on good growing conditions and favourable commodity prices have led to the strong result”. In particular, SAF benefited from good yields on cotton crops at Darlington Point, weight gains and strong market conditions at King Island, and yearly productivity improvements at SAF’s Tasmanian dairy farms.
Diversification also played a role in SAF’s returns given SAF’s North Star Aggregation and Western Victoria Aggregation experienced rainfall at multi-decade lows. Martin explains, “While we do not export all our farms to be earning record profits all the time, it was a particularly dry year at our largest aggregation in northern New South Wales. Our strong profit result demonstrates the benefit of the fund’s diversification strategy versus single commodity or region exposure”.
The medium term trajectory for SAF remains strong. With the improved outlook for the industry as a consequence of the low Australian dollar and free trade agreements opening up export markets, agCap improved profitability will begin to be reflected in asset values after a historically flat period for asset prices.