Scales Corp forecasts 2017 earnings at upper end of guidance, sees improvement in 2018

Tuesday 5th December 2017

Scales Corp now expects full-year earnings to be at the upper end of guidance on the performance of its horticulture division and new acquisitions. Earnings will rise in 2018, it said.

Earnings before interest, tax, depreciation and amortisation are likely to be at the upper-end of previous guidance of between $55 million and $62 million in calendar 2017, the Christchurch-based company said in a statement. Ebitda in the prior year was $67.3 million. The company will pay an interim dividend of 9 cents per share on Jan. 19, 2018, 12.5 percent higher than the 8 cents per share it paid in January 2017.

Ebitda is expected to be between $58 million and $65 million in 2018.

Scales managing director Andy Borland said the 2017 result will reflect a resilient result from its horticulture division despite challenging growing conditions and "other divisions have traded well and are expecting to produce a result that, in aggregate, is consistent with 2016 performance if not slightly higher." First-half profit fell 14 percent after its apple orchards were hit by heavy rain and winds and needed more expensive care.

Scales has three operating divisions: horticulture, storage & logistics and food ingredients.

Borland said recent acquisitions - Longview Group Holdings and OceanAir - are performing well. It bought the Hawke's Bay apple grower, packer and marketer Longview for $20.5 million in November 2016, adding capacity to sell fruit into fast-growing Asian markets. The acquisition of OceanAir was completed on Aug. 1 and adds Auckland and Melbourne ports along with expertise in handling perishable products to its growing freight forwarding and logistics business.

Scales shares recently rose 1.8 percent at $3.96 and have gained 13 percent so far this year.

(BusinessDesk)

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