“These strong headline results were achieved because of the effort of growers, the post-harvest sector and the Zespri team onshore and in the markets,” Zespri chairman Peter McBride said.
“Our result was helped by sales performance and by productivity increases, with average yields now at nearly 9000 trays per hectare.”
Zespri sold 69m trays of Zespri Green kiwifruit from NZ at the highest-ever average per hectare return for the industry of $53,884 and a very strong average per tray return of $6.01.
Commenting on the record returns for Green kiwifruit, McBride highlighted two factors.
“Our result was helped by sales performance and by productivity increases, with average yields now at nearly 9000 trays per hectare.”
The shortage of Chilean kiwifruit in the market, following severe frosts in Chile, also contributed to the strong Green returns.
Demand for Zespri organic Green kiwifruit remained steady in 2014-15, with sales of 3.5m trays and a return of $43,996/ha.
Green14 was well-received by customers and Zespri continued to work to understand the positioning of this product. The average orchard gate return per hectare of $29,682 reflected that productive hectares are not yet at full commercial production levels.
“Our result was helped by sales performance and by productivity increases, with average yields now at nearly 9000 trays per hectare.”
Peter McBride
Zespri
Gold returns fell to $73,890/ha and $9.80/tray, owing in part to the remarkable rebound in Gold kiwifruit production, led by Gold3. Total Gold supply increased from 11.1m trays in 2013-14 to 18.6m trays in 2014-15.
The lower per hectare return also reflected the fact that average industry Gold3 yields are below potential at this stage, following the recovery from Psa. Average yields will increase strongly as developing canopies come into full production in the next few years.
Supply of non-NZ kiwifruit increased from 11.2m trays to 13.3m trays. There was a notable increase in volumes sold into both Europe and China of Green kiwifruit, with most production sourced from Italy. Zespri Global Supply delivered a profit before tax of $8.99m.
On the supply side, there were still a number of orchards and growers affected by Psa, but the industry was focused on proactively managing the risk.
The volume of NZ-grown kiwifruit sales increased 11% to 95.2m trays, with Gold3 continuing to provide a robust recovery pathway for the industry. Gold3 was on track to reach over 60m trays of supply by 2019-20 as new plantings and new grafts come into production.
Zespri chief executive Lain Jager said the company would remain focused on delivering strong, sustainable returns to growers and shareholders, but also pointed out some headwinds weighing on performance.
“The strong NZ dollar reduced NZ grower returns by $58.1m in the 2014-15 season compared to the 2013-14 season – however, our hedging policy for the NZ grower pools offset the strength of the NZ dollar by $103.7m compared to the spot rate.”
The company forecast lower returns in the upcoming season because of returning Chilean supply and its Gold3 strand boosting volumes of the higher value Gold kiwifruit variety, while the relatively high currency also continued to eat into export earnings. Zespri anticipated Green kiwifruit to offer returns in a range of $5-$5.50/tray, while Gold is forecast at $6.70-$7.20/tray.
Jager said the company’s hedging policy offset strength in the kiwi by $103.7m compared to the spot rate, with the currency cutting returns by $$58.1m in the season.
The board declared a final dividend of 7 cents per share, taking the annual payment to 12 cents, up from 11 cents in the 2013-14 season.
