Seeka first-half profit more than doubles on record kiwifruit harvest; FY earnings to rise up to 40%

Wednesday 19th August 2015

Seeka Kiwifruit Industries, the country's biggest kiwifruit grower, more than doubled first-half profit as it benefited from a record harvest, and the company sees annual earnings rising as much as 40 percent.

Net profit rose to $3.7 million, or 24 cents per share, in the six months ended June 30, from $1.5 million, or 10 cents, a year earlier, the Te Puke-based company said in a statement. Earnings before interest, tax, depreciation and amortisation jumped 115 percent to $11.4 million, on a 32 percent gain in revenue to $104.7 million.

The profit increase reflected "record kiwifruit volumes handled by post-harvest along with good earnings achieved by the orchard division," the company said. "While margins have remained tight, the greater volumes of fruit delivered the benefits of scale to both shareholders and growers."

Earlier this month Seeka announced plans to buy Australia's Bunbartha Fruit Packers for A$22 million, making it the biggest kiwifruit grower on both sides of the Tasman, and adding an estimated $17 million in annual revenue and earnings in a range of $3.2 million to $4 million.

Seeka said it expects the stronger first-half result will extend into the second half, and gave guidance for annual net profit to be between 30 percent and 40 percent higher than the $3.2 million it posted in 2014.

The board declared an interim dividend of 9 cents per share, payable on Sept. 18 with a Sept. 11 record date. That's up from 7 cents a year earlier.

The shares were unchanged at $3.45, and have gained 6.8 percent this year.

The first-half result includes a $2.17 million impairment charge on the buildings destroyed by a fire at Seeka's Oakside site earlier this year, offset by $2.31 million in insurance proceeds relating to the claim.

Seeka's orchard unit lifted revenue 22 percent to $32.9 million for a 51 percent increase in Ebitda to $4.5 million, while the post-harvest operations increased sales 32 percent to $59.8 million and more than doubled earnings to $11 million.

The retail division, which is made up of domestic sales and exports, excluding kiwifruit sold through Zespri International, lifted sales 69 percent to $12 million, while Ebitda sank 37 percent to $526,000. The drop in earnings was put down to lower volumes and prices for avocados.

BusinessDesk.co.nz

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