Zespri doubles annual profit on deferred Gold license revenue, sales climb 16%

Zespri International, which controls exports of New Zealand kiwifruit, more than doubled annual profit after it recognised deferred revenue from earlier seasons, while lifting sales 16% on productivity gains and a shortage of rival Chilean kiwifruit.

Net profit rose to $34.6 million in the 12 months ended March 31 from $17.2 million a year earlier, the Mt Maunganui-based company said in a statement. Stripping out a $13.1 million gain from the inclusion of Gold kiwifruit license revenue that had been deferred from earlier seasons, earnings were $21.5 million. Sales rose to $1.57 billion from $1.22 billion year earlier, with export earnings up 18% to $1.09 billion.

"These strong headline results were achieved because of the effort of growers, the post-harvest sector and the Zespri team onshore and in the markets," chairman Peter McBride said. "Our result was helped by sales performance and by productivity increases, with average yields now at nearly 9000 trays per hectare."

In December, Zespri said it expected record pre-hectare returns for green and green organic kiwifruit in the season, due to the Chilean supply constraints, favourable market conditions and strong end-of-season sales.

Zespri sold 69 million trays of green kiwifruit at a record per hectare return of $53,884 at $6.01 a tray. Gold returns were $73,890 a hectare and $9.80 a tray, with 18.6 million trays sold in the season. Some 3.5 million trays of organic green kiwifruit were sold at a return of $43,996 a hectare.

The company forecast lower returns in the upcoming season as Chilean supply returns and its Gold3 strand boosts volumes of the higher-value gold kiwifruit variety, while the currency continues to eat into export earnings. Zespri anticipates green kiwifruit to offer returns in a range of $5-5.50 a tray, while gold is forecast at $6.70-7.20 a tray.

Chief executive Lain Jager said the company's hedging policy offset strength in the kiwi dollar by $103.7 million compared to the spot rate, with the currency cutting returns by $58.1 million in the season.

The board declared a final dividend of 7c a share, taking the annual payment to 12c, up from 11c in the 2013/14 season.

(BusinessDesk)