AsureQuality posts 5% drop in 1H profit as costs rise; expects to beat FY target

AsureQuality, the state-owned food-testing company, posted a 5 percent drop in first-half profit, reflecting higher operating costs to develop future revenue streams and higher interest costs.

Profit fell to $5.3 million in the six months ended Dec. 31, from $5.7 million in the year earlier period, the Auckland-based state-owned enterprise said in a statement. Revenue rose 9 percent to $87 million.

AsureQuality said it expects to exceed its full-year profit forecast of $10 million following improved trading in the first half and after a slower-than-expected impact from changes to the country's meat inspection regime. It had annual profit of $12.5 million last year.

"The revenue growth has been driven by a growth in laboratory testing volumes from the dairy and food sectors, and higher volumes of testing for live animal export shipments," the company said. Its higher operating costs were in line with budget, it said.

AsureQuality paid a special dividend of $2.5 million and an interim dividend of $3 million to the government, in line with payments in the year earlier period.