Pāmu has delivered its strongest operating result on record, with better farm performance, careful cost management and stronger returns for New Zealanders. As a state-owned farming business, Pāmu farms on behalf of the public of Aotearoa New Zealand, and this year’s result reflects the hard work of its farm teams, improved production, lower debt and disciplined everyday decisions across the business.
Despite global cost challenges, the result shows how practical improvements on farm, growing more feed, lifting animal performance, reducing waste, managing costs with discipline, and looking after people, animals and the environment are flowing through to stronger financial results.
FY26 financial and performance highlights
- Dividend payments of $25 million during FY26, with a further $15 million to be paid in early FY27.
- Return on Equity 9% up from 7.3% in FY25. Net Operating Profit (NOP) of $113 million, up 131% from $49 million in FY25. (NOP provides a better reflection of company performance, as it excludes the impact of large and often one-off revaluations of assets, such as livestock and farms.)
- Net Profit After Tax (NPAT) of $160 million, compared with $120 million in FY25.
- Net debt reduced by $36 million, continuing to strengthen the balance sheet.
- Milk production of 15.8 million kilograms of milk solids (2.1 million kilograms of milk solids increase since FY23 and 1.8 million kilograms of milk solids increase since FY25).
- Livestock production of 22 million kilograms of product including wool and velvet converted to carcass weight (2.2 million kilograms increase since FY23 and 0.1 million kilograms increase since FY25)
- Dairy cost of production of $7.06/kilograms of milk solids (down 4% on FY25, up 8% since FY23)
- Livestock cost of production $4.91/kilograms liveweight (up 7% on FY25, down 14% since FY23)
- Production gains over the past three years have contributed to an increase in revenue of 56% compared with FY23.
Pāmu Chief Executive Mark Leslie said the result reflected a sustained lift in farm performance across the organisation.
"This is a fantastic result for Pāmu, and it belongs to our people. It reflects several years of hard work across our farms and teams improving how we farm, making good decisions every day, keeping a close eye on costs, and getting more from the land and animals in our care."
While stronger commodity prices contributed to the outcome, Mr Leslie said the result was about much more than pricing.
"Price has certainly helped, but our progress goes well beyond the market cycle. Over the past three years we've seen stronger production, improved cost control, a sharper focus on safety and wellbeing, continued progress in reducing emissions, and a stronger connection between our strategy and what happens on farm every day.
"Those are improvements we can control, and they give us confidence that Pāmu is in better shape to keep delivering strong returns for future generations of New Zealanders."
Building a stronger balance sheet
Pāmu has also continued to strengthen its financial position, reducing debt while returning value to New Zealanders, who own the business through the Crown.
Over the past year, debt has reduced by $36 million, improving resilience and creating greater flexibility to invest through the cycle.
"Agriculture remains a volatile business. Commodity prices, input costs, climate events and global uncertainty can all change quickly. That's why strengthening the balance sheet has been such an important focus. Lower debt and a stronger financial position help us manage uncertainty and continue investing in operational excellence over the long term."
Other highlights
- Pāmu made progress on key operational priorities, including maintaining a strong focus on safety and improving animal performance across its farming portfolio.
- Continued growth in beef-on-dairy production and supply, rearing 72% of all dairy calves born, up from 65.5% in FY25 and 49% in FY23.
- Farm Environment Plans in place across 100% of farms to guide investment and support pricing premium opportunities.
- We have embedded our second year of Pāmu apprentices, expanded dairy sharemilker and contract farming opportunities, welcomed our first livestock equity partners, and invested in growing capability across our business, while maintaining a strong focus on safety and the management of critical risks.
Mr Leslie said with improvements in core performance, the business was well positioned to pursue growth and commercial partnership opportunities. This includes continued progress through programmes such as Livestock Innovation Farming Transformation (LIFT), nature reinvestment, and equity partnership models to support talent progression across both dairy and livestock farming.
"The priority was getting the basics right. Better production, careful cost management and good on-farm decisions have given us a stronger base to work from. We are now looking at opportunities that create more value from the land and assets we care for, support our people, and help Pāmu keep performing for Aotearoa New Zealand over the long term."
Outlook
Pāmu is forecasting Net Operating Profit for FY27 in the range of $77 million to $87 million.
Mr Leslie said this reflects continued strength in underlying farm performance, while recognising ongoing tensions and instability in the Middle East, alongside forecast El Niño conditions, were expected to increase costs and create productivity challenges.
"We expect the operating environment to remain uncertain and more expensive than prior years. "Our response remains the same: focus on what we can control, keep making good decisions on farm, manage costs carefully, look after our people, animals and environment, and keep improving so Pāmu performs strongly for New Zealand over the long term. "We are very proud of what the team has achieved. The challenge now is to make these gains durable, keep improving through the cycle and ensure Pāmu continues creating value for New Zealand for many years to come," Mark Leslie said.
Financial measures
There are several methods for measuring profit and loss. The preferred measurement for Pāmu is Net Operating Profit (NOP). NOP provides a better reflection of company performance, as it excludes the impact of large and often one-off revaluations of assets, such as livestock and farms.
Net Profit After Tax provides the overall financial position and includes revaluations on livestock and farms. Livestock is revalued at the end of each financial year, reflecting market prices, which are outside the company's control and therefore not a good indication of performance. Pāmu farms are revalued when the market has materially changed, and the impact can be large and have a significant positive or negative effect on after-tax results.
