Property tax bites produce company
Turners & Growers' net profit fell 43% after it paid $5.1 million for the budget's property depreciation charge.
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The government budget’s one-off abolition of property depreciation on commercial buildings has bitten off most of produce company Turners & Growers’ net profit for 2010.
While the company boosted sales marginally to just under $600 million, the net profit, after the $5.1 million depreciation expense, fell 43% to $4.9 million compared with last year’s $8.6 million.
The country’s largest produce company, which is 65% owned by GPG, says the bottom line was also affected by a large one-off $3.4 million valuation write-down of its 50% investment in Nelson orchardist Inglis Horticulture (since increased to 100%). It also paid tax of $5.6 million.
The company said its domestic markets, including imports, were up on 2009, with strong margins on some key product lines. Returns on imported produce were also sound, helped by the strength of the New Zealand dollar.
But returns from the Enza apple exporting business returns were down, due to the high currency. Some apple growers were struggling to break even, the company said.
By contrast, the Delica operation had another impressive year and was up more than 30% on 2009, with the only bad news coming from Australia, where extreme weather conditions hurt some key export varieties.
Low juice prices
The Enza Foods apple juice division was hit by low prices for much of the year with an improvement coming only in the final few months of the year.
The Hawke’s Bay factory is being expanded to include a fruit ingredients plant that complements the Nelson factory, which is at full capacity.
“This will shift the product mix toward higher priced products and avoid the commodity trap,” the company said.
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The Status Produce tomato production division performed well and Kerifresh, the citrus and kiwifruit grower packer, is profitable after two years of ownership.
The company also announced it had formed a new joint venture in Fiji to supply produce to supermarkets and a number of resorts.
“Early signs are that most business units are trading well and the board is confident that 2011 will produce improved results,” it said.
Nevil Gibson
Tue, 01 Mar 2011
Tue, 01 Mar 2011
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Property tax bites produce company
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