PGW, SEK, LIC: 3 agri stocks amid new emission reduction norms

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PGW, SEK, LIC: 3 agri stocks amid new emission reduction norms

 PGW, SEK, LIC:  3 agri stocks amid new emission reduction norms
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  • Agriculture emissions have been in focus in the Emissions Reduction Plan announced recently
  • A special five-year plan has been put in place to reduce methane
  • The government has committed NZ$700 million over 4 years to lower agri emissions

The Emissions Reduction Plan (ERP), announced recently, has focused on the agriculture sector.  A separate five-year program has been put in place to reduce methane and build resilience.    The government has committed more than NZ$700 million over four years to lower agricultural emissions, expand the contribution of forestry to reduce carbon, and produce alternative “green” fuels.

All these actions are slated to be paid for through the emissions trading scheme. This is despite the fact that the agriculture sector has been exempted from payments for the emissions trading scheme till 2025. According to the plan, there will also be a new centre for climate action on agriculture emissions. These will drive innovation and product development.

Against this backdrop, let’s see how these three agriculture stocks are doing.

 NZ, NZX, agri, emissions, agritech, ERP

Source: © 2022 Kalkine Media®

PGG Wrightson Limited (NZX:PGW)

PGW is a supplier of agricultural goods in New Zealand.  Of late, its Chairman Rodger Finlay announced that the Company would see continued demand in Q3 due to its strong half-year results. PGW increased its Operating EBITDA guidance from NZ$62 million to around NZ$66 million for the whole year. The Company has also seen an increased demand in all its segments and the Q3 trading had exceeded all expectations.

Also Read: PGG Wrightson's (NZX:PGG) revenue soars despite COVID-19 impact

On 25 May, the stock was down 0.21% at NZ$4.65, at the time of writing.

Livestock Improvement Corporation Limited (NZX:LIC)

LIC is New Zealand’s leading agri-tech company. It delivered robust results despite cost pressures. It delivered a revenue growth of 5.4% and an EBITDA growth of 4.7% in the half year.

The Company also announced a fully imputed special dividend of 10 cps. The dividend was paid in January and was worth NZ$14.2 million. It divested its automation business. It said that would enable it to focus more on delivering leading pasture-based dairy genetics and herd management systems for farmers.

Also Read: PGW, LIC: 2 agriculture stocks to watch as exports set to rise
Related Read: PGW, LIC: 2 agriculture stocks buzz on NZX as PGW upgrades guidance

On 25 May, the stock was trading flat at NZ$ 1.60 at the time of writing.

Seeka Limited (NZX:SEK)

SEK is a horticulture company which is in the business of growing, processing, distributing, and marketing high-quality products to world markets. Its results reflected significant growth due to its sound strategy in these disrupted times. Its NPAT was up 44% and the revenue was up 23% at NZ$ 310 million. Its EBITDA was up 32% to NZ$56.8 million. The Company rewarded its shareholders with a dividend of 0.13 cps on 23 February.

The Company has acquired three regional companies. Its latest acquisition was NZ Fruits Limited. This was achieved at the beginning of 2022.

Also Read: LIC, & SEK: 2 NZX consumer stocks riding on GDP wave

Related Read: PGW, SEK, SCL: 3 consumer stocks that can be considered amid rising inflation

On 25 May, the stock was trading down by 1.01% at NZ$4.89, at the time of writing.

Bottom Line:  The Emissions Reduction Plan focuses on the agriculture sector for its emission reduction target and also allocates a fund of NZ$700 over 4 years. Agri companies will have to gear up to meet the targets.


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