Friday, March 29, 2024

Zespri strikes gold in season’s returns

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Solid growth in international sales volumes, a faster rise in accompanying fruit revenue and strong fruit licensing income have all helped push Zespri’s gross revenue exceed $3 billion, a first for the kiwifruit marketer.
Zespri chair Bruce Cameron says the free trade agreement will deliver the kiwifruit industry $46 million in tariff savings.
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The results have SunGold growers, particularly, in the box seat for increased returns, up 28% on last year.

As the industry’s sole exporter of kiwifruit Zespri had a 21% increase in sales volumes last season, moving a record 167.2 million trays over 2018-19 season while the revenue generated rose by 26% to $3.14 billion.

The announced increase has also been matched by a 24% lift in the total premiums and payments made to growers.

They amounted to $1.82b, which has pushed average orchard gate returns up by 6% to $63,622 a hectare for Green growers and a massive 28% for SunGold growers putting their average orchard gate returns at almost $146,000 a canopy hectare.

Zespri chairman Bruce Cameron said higher than expected volumes of Green fruit pushed returns per tray down slightly but that was offset by higher-than-expected volumes that pushed out that fruit’s sales window.

Meantime, SunGold continues to enjoy strong uptake, particularly in developing Asian markets.

“Consumers around the world are increasingly embracing healthier products and want more of our kiwifruit because they know it is a convenient way to get their daily nutrition and because it tastes great,” Cameron said.

Overall net profit for Zespri was almost $180m, up from $101m in 2017-18. 

Zespri noted the strong impact on revenue figures its fruit licensing for SunGold is having and now represents 6% of the company’s income. 

Gross revenue of $192.8m was generated from SunGold fruit licences last year, taking the average per hectare value to buy a licence to $256,000 a hectare. 

This year’s tranche of 750ha is estimated to average $290,000 a hectare, with another two seasons to follow this season in the five-year release plan.

Zespri’s shares have been undergoing a re-allocation in recent months as grower shareholdings align closer with production.

The buy-back scheme to remove retired growers achieved a reduction of 30% in ex growers by late last year. There were 250 applications for the buy-back from non growers and 427 applications for the purchase of $95m of shares by existing growers, increasing the percentage of shares held by growers to 85%.

On the back of the profit announcement Zespri is expected to pay a dividend of 92c a share, up from 50c last season.

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