Friday, March 29, 2024

Zespri doubles its profit

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Zespri has lifted its sales volume this season by 18% on the back of increased yields and its largest-ever crop.
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Chairman Peter McBride said Zespri sold more fruit faster than ever before during the 2016-17 season, with global fruit sales revenue rising by 19% to $2.26 billion.

“Volume growth and continued strong investment by Zespri into marketing and market development helped to lift returns overall with the average return per hectare for New Zealand growers reaching $68,868.”

The 2016-17 season also saw the announcement of 1800 hectares of SunGold licences allocated for Europe over the next three years, doubling Zespri’s offshore production of the variety to meet growing demand for 12 month supply.

Zespri’s net profit after tax more than doubled from $35.8 million to $73.7m, mainly because of revenue from the tender for licences for Zespri’s proprietary variety SunGold last year.

“There was strong industry participation in the release of 400 hectares of SunGold licences in NZ last year, reflecting the continued grower confidence in global demand for gold kiwifruit,” McBride said.

The Zespri board approved the intention to declare a 2017 final fully-imputed dividend of 17 cents a share, payable in August. That took the total dividend to 25 cents a share.

Zespri’s distributable profit range for the 2017-18 financial year was expected to be $101m to $106m, based on the forecast net profit after tax range announced in April.

It expected to distribute dividends in the range of 80-90%. An interim dividend was normally paid in December and the board would consider making an extra interim dividend in August.

McBride said the season was challenging in several respects.

“A sharp increase in Green volume and a late start to the season due to delayed maturity put pressure on pricing but record average yields of 12,281 trays a hectare meant the industry could achieve per-hectare returns of $53,555.”

It was the third successive season Zespri delivered average Green returns of more than $50,000 a hectare. The Green return per tray was $4.36, down from $5.13 a tray in 2015-16.

Zespri achieved an average per-tray return for the Gold pool of $8.64, up from $8.21 in 2015, despite supply increasing to 48.5m trays from 32.6m trays in 2015-16. Average per-hectare returns increased by 39% to $98,838.

The average per-hectare return of $54,427 (2015-16: $52,917) for Organic Green was a record result, supported by strong yields though the return per tray fell to $6.86 (2015-16: $7.18). The return per tray for Green14 (Sweet Green) was $5.79 (2015-16: $7.01) but the average per-hectare return increased to $45,853, driven by higher average yields as orchards came into full production.

“We can be satisfied overall with performance in the season with a good result delivered despite the challenges of a sharp increase in supply and a relatively late harvest,” McBride said.

Zespri chief executive Lain Jager said the volume outlook for 2017-18 was slightly down on last season but still the second-largest crop in the company’s history.

“Supplied SunGold volumes will increase to around 55m trays but seasonal factors will see Green volumes fall back to around 69m trays supplied versus 83m trays sold last year.

“Our sales and marketing teams are launching programmes in 59 countries and working hard to maximise value to growers and shareholders through great campaigns and promotions in support of our premium kiwifruit,” Jager said.

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