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Turners & Growers [NZX: TUR], the fruit marketer controlled by Germany's BayWa, turned to an annual profit in 2013 following two years of losses when it wrote down the value of its orchards.
Net profit rose to $16.2 million in calendar 2013, from a loss of $15.3 million in 2012 and a loss of $19.9 million in 2011, the Auckland-based company said in a statement. It wrote down the value of its assets by $29 million in 2012 and by $20.9 million in 2011.
Turners & Growers said higher volumes, price increases, greater access to new markets and customers in Asia, and cost cuts helped boost its export earnings to $15.6 million in 2013 from $2.9 million in 2012.
In New Zealand, the business experienced tough market conditions in the second quarter with low margins on imported produce and weak prices for tomatoes although a strong performance in the fourth quarter helped boost earnings to $3.6 million from $1.5 million a year earlier.
Trading so far in 2014 is "within expectations", chairman Klaus Josef Lutz said in the statement, without providing details.
Turners & Growers isn't paying a dividend for 2013, and also paid no dividend in 2012.
The company said depressed world market prices for apple juice concentrate, combined with a sharp rise in the New Zealand dollar against the Australian and US currencies alongside storage constraints resulted in substantial erosion in margins for its processing business. The unit turned to a loss of $3.1 million in 2013 from positive earnings of $3.3 million in 2012, it said.
Its growing operations turned to a profit of $6.7 million from a loss of $22.8 million in 2012 as gains in the performance of its apple orchards and the kiwifruit crop offset lower tomato prices and weaker citrus margins.
The shares, of which BayWa owns about 73 percent, last traded at $2, and have gained 14 percent this year.