Scales Corp 2013 earnings rise 50% on growing Asian demand for apples
Scales Corp, the fruit and vegetable logistics group controlled by private equity firm Direct Capital, lifted 2013 profit by 50 percent as rising Asian demand for apples helped mitigate the impact of a stronger kiwi dollar.
Net profit rose to $20.4 million in calendar 2013, from $13.6 million a year earlier, the Christchurch-based company said in a statement. Sales rose 17 percent to $278 million. The Mr Apple unit exported 4 million cartons, of which 2.82 million cartons were grown at its own orchards. Scales didn't break down earnings for its horticulture, storage and logistics, and food ingredients units.
"We are increasing apple volumes targeted at premium Asian markets," said Andy Borland, managing director. "Apple prices were strong in most of the company's key markets which more than offset the impact of a persistently high New Zealand dollar."
Apples made up a third of New Zealand's $1.55 billion in fruit exports in the year ended March 31, with Thailand the biggest destination in Asia with $46 million in annual sales.
Direct Capital, with the New Zealand Superannuation Fund and Accident Compensation Corp as co-investors, acquired a 79 percent stake in Scales for $44 million in 2011 from Allan Hubbard's failed finance group, South Canterbury Finance. The holding now sits at 84 percent and Direct Capital's Anthony Batterton and Mark Hutton are two of the four Scales directors.
Scales launched a new air freight service, Balance Cargo, in the period which it said secured new clients. Sea freight operations benefited from increased volumes of apples, passing on savings to Mr Apple through its competitive rates.
Polarcold, its South Island cold storage operation, and its North Island Whakatu Coldstores unit met expectations and are securing longer term contracts, the company said. It expanded capacity for bulk liquid storage with a new 2,000 tonne tank at Port of Napier.
Its fruit juice concentrate business Pro Fruit and Scales Meateor pet food unit had a good performance, it said, without being specific.