Kiwifruit losses hit Turners & Growers
The country's largest produce company will report a net loss after writedowns of $17-19 million in the 2011 financial year.
Turners & Growers is writing down the value of its orchards in the wake of the kiwifruit bacteria outbreak, resulting in a net loss of $17-19 million in the 2011 financial year to December 31.
Chairman Rob Campbell says the company traded profitably in 2011, with the draft pre-audit operating performance ahead of last year, but this will be eliminated buy the orchard writeoffs and costs associated with the BayWa takeover offer.
Mr Campbell said these could result in total losses of $20-30 million to the value of T&G's orchard land and other biological assets.
“The recent outbreak of the kiwifruit Psa disease, poor grower returns and global economic uncertainty have principally caused the orchard land to depreciate considerably,” he said.
The writedowns also included a previously advised deferred tax asset, comprising the tax effect of recognised tax losses of approximately $8 million, due to the loss of continuity caused by the likely takeover by BayWa, he said.
The German agribusiness company is offering $1.85 a share and has acceptances for 67.1%, including the GPG stake of 63.5%. That offer has been extended to February 8. It is still subject to Overseas Investment Office approval.
Another buyer, Scales Corporation, has bought has bought a 5.95% stake with options to buy a further 4% at $1.90 from individual shareholders and Tyndall Investment Management NZ.
The net cost of the T&G writedowns, which are subject to audit review, were approximately $21 million, offset by an accounting net gain of approximately $6 million to the balance sheet, while a net loss of approximately $27 million will be recorded in the consolidated income statement.
“It should be noted that the underlying asset base has not changed and the writedowns do not impact the cash position of the T&G Group,” Mr Campbell said.
Nevil Gibson
Mon, 23 Jan 2012
Mon, 23 Jan 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Kiwifruit losses hit Turners & Growers
18540