Italian kiwifruit orchard write-off won't impact Seeka earnings

Wednesday 7th April 2010

Seeka doesn’t expect its share in an about-to-be written off Italian kiwifruit orchard to impact on its expected earnings for the March year.

The Te Puke based kiwifruit orchard manager and packhouse has a 19.2% share in Opotiki Packing and Coolstorage, and has just been advised that OPAC’s 84 hectare Newgold in Italy is suffering an ongoing bacterial disease in its Gold kiwifruit. OPAC told Seeka that it’s writing off the full cost of its investment in the Newgold orchard, valued at $7.16 million, in its financial statements.

Seeka says it will record its share of the loss in its own financial results to March 31, though any impact will be non-cash and expected to be less than $1 million.

Chief executive Michael Franks said it will not impact on the company’s banking covenant compliance or facilities. The late November interim results guidance Seeka gave of its expected full year operational earnings before tax, non-recurring items, impairments and items related to the purchase of Huka Pak, in the range of $6.9 million to $7.5 million, remains unchanged Franks said. This excludes Seeka’s share of the anticipated OPAC loss. Its 2009 earnings were $5.6 million.

He said that as part of the market’s requirement of continuous disclosure, such an announcement is a “healthy discipline”.

The current kiwifruit has got off to a very early start he said, with the Huka Pak coolstore having an earlier fruiting catchment than some of Seeka’s other orchards, while a general lack of rain has brought fruit maturity and harvest forward as well.

“We’re aiming to finish harvesting in the first week of June,” Franks said. “It could be earlier if we get a good run of weather. We’ll be putting that fruit away like squirrels, and pack it out later through to August.”

Businesswire.co.nz

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