UPDATE: Scales shares rise 2% as Mr Apple drives first-half earnings growth

Net profit climbed to $32.2 million, or 23.8c per share, in the six months ended June 30.

See also: Scales ups forecast annual apple volumes by 200k trays through to 2018

UPDATEDScales Corp [NZX: SCL] shares rose 2 percent after the country's biggest apple exporter boosted first-half profit 61 percent as its Mr Apple unit beat expectations.

Net profit climbed to $32.2 million, or 23.8c per share, in the six months ended June 30, from $20.6 million, or 17.3 cents, a year earlier, the Christchurch-based company said in a statement. The shares rose 4c to $2.02, and have climbed 38 percent this year.

"The company's performing extremely well in the current environment," said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. "The lower dollar helps them as well."

Earnings before interest, tax, depreciation and amortisation climbed 47 percent to $52.4 million on a 7.3 percent gain in sales to $161.2 million. Scales' horticulture unit, which includes the Mr Apple business, boosted earnings 52 percent to $35 million on a 4 percent gain in revenue to $93.7 million.

Earlier this month Scales upgraded its annual earnings guidance based on the strong performance of the horticulture unit, saying ebitda is expected to be 25-35 percent higher than its prospectus forecast for $41.2 million in calendar 2015, implying earnings of between $51.5 million and $55.6 million for the year. The company today affirmed that guidance.

Chief executive Andy Borland told BusinessDesk the vertically integrated Mr Apple delivered strong results across the board, and Scales delivered a record apple crop that was 11 percent above the previous peak in 2013.

"That shows us we should be a three million a year carton business, and that's up about 200,000 on what we said we'd be doing in our prospectus for the likes of 2016,17 and 18," Mr Borland said.

He is optimistic about the coming season, saying "frosty weather through the winter's been positive for the trees and we're expecting a normal crop at this early stage."

Scales' food ingredients business lifted first-half sales 20 percent to $22.6 million for a 23 percent gain in segment profit to $3.4 million, while its storage and logistics segment increased sales 8.8 percent to $44.7 million for a 33 percent boost in earnings to $10.5 million.

The company will complete a new coolstore at Ports of Auckland's intermodal hub in South Auckland in October, which will boost capacity by 16 percent, and Mr Borland expects that will flow into operating earnings.

"We're certainly experiencing strong growth in that storage and logistics areas, both in that cold storage and bulk liquid storage," he said. "That is an area of positive growth for us."

The board will consider an interim dividend payment later in the year, with the company's policy to evenly split the half- and full-year returns, paying them in January and July.

(BusinessDesk)