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Rural services firm PGG Wrightson has revised down its operating earnings guidance for the current June year due to deteriorating market conditions.��

The company now expects its operating earnings before interest, tax, depreciation and amortisation (Ebitda) to be around $43 million for the year, down from a previous guidance of $50m. The new guidance compares with PGG Wrightson’s Ebitda of $61.2m for the June 2023 year.��

“Since releasing our half-year results in February, trading conditions have deteriorated because of market conditions that are impacting the whole of the agricultural sector,” PGG Wrightson chairman Garry Moore said.��

PGG Wrightson said the factors restraining spending patterns in the rural sector included:��

- Drought conditions with soil moisture deficits against historic averages across much of the East Coast, Tasman and Northland over the first quarter of 2024.��

- Weak sheep meat demand from China and increased supply culminating in lower farmgate returns.��

- Interest rates and input costs remain elevated, impacting on-farm and on-orchard profitability with clients looking to reduce debt and defer spend.��

PGG Wrightson said although the harvest season has been broadly positive, there is a time lag in the conversion cycle before farmers and growers see the financial benefits from their harvest production.��

“Whilst we have seen a slight uptick in farmer and grower confidence in recent months, this is off a low base and sentiment in the sector remains subdued,” Moore said.��

“Despite the present difficult market conditions, we remain positive about the prospects for the sector over the medium to longer term and have confidence that PGG Wrightson is well-placed to support our clients through these challenging times and beyond,” he said.��

Notwithstanding the poorer trading conditions, the company continued to maintain and grow share in the markets in which it operates.��

Earlier this month, Moore told the��Herald��it’s back to business as usual for PGG Wrightson after a boardroom wrangle.��

Last month, former PGW chairman Alan Lai’s Agria - which owns 44 per cent of the company - withdrew a notice seeking a shareholders’ meeting to��consider several directorship changes.����

The New Zealand Shareholders’ Association opposed the moves.����

Moore said in the��Herald��interview��it was time to move on after the boardroom tussle.��

“The key point is that we are over our governance issues and want to move forward and demonstrate that we are a good shop,” he said.��

Moore, an investment adviser with over 36 years of experience, was elected chairman by a majority in February of this year.��

The company’s shares last traded at $2.02, up 8c.��

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the��Herald��in 2011.��

This article was originally published on the NZ Herald .��