Zespri doubles FY profit on deferred revenues, sales jump   21 May 2015

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

By Paul McBeth

May 21 (BusinessDesk) - Zespri International, which controls exports of New Zealand kiwifruit, more than doubled annual profit after it recognised deferred revenue from prior seasons, while lifting sales 16 percent 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 on in 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 percent 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 9,000 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 per tray. Gold returns were $73,890 per hectare and $9.80 per 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 per 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 to $5.50 per tray, while gold is forecast at $6.70 to $7.20 per 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 7 cents per share, taking the annual payment to 12 cents, up from 11 cents in the 2013/14 season.

(BusinessDesk)

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