Satara says profits will be crimped by strong dollar

Satara Co operative Group Limited, Australasia's largest kiwifruit co-operative, said today that its half year result had been hit by the strong dollar -- but that conclusions about full year profits based on half year results would be premature.

The group posted a net surplus after tax for the six months ended 30 June 2005 of $137,061.

Group general manager Murray Gough said projecting from that a full year return of around $280,000 would be an error due primarily to the fact that the group's earnings are seasonal in nature, with the bulk of sales happening in the second half.

In 2004 Satara's profit before tax and rebates was $4.2 million on a record kiwifruit crop of 11.182 million trays packed.

The crop will be smaller this year, Satara said, but the primary cause of declining revenue would be the continued strength of the dollar relative to the currencies of its main trading partners of Japan and Europe.

That has contributed to a forecast reduction in orchard division income of $0.81 cents per Green tray, recently announced by Zespri, he said.

Mr Gough said Satara has made full provision in its half year accounts for the estimated impact of Zespri's reduced forecast.

"Zespri has reported market prices for kiwifruit have remained strong in their local currencies, which gives us confidence kiwifruit returns will improve as the New Zealand dollar comes off its current highs."

Overall the 11.14 million trays harvested in 2005 is similar to the previous year, said Mr Gough, but the 2.41 million trays harvested from Satara's leased orchards in 2005 was slightly behind the previous year's crop of 2.74 million trays.

"All our facilities have been fully utilised and we're on track to achieve another year of great packing and storage results," said Mr Gough.

"As a result our post-harvest operation comprising of our packhouse and coolstore business has traded well during the first half of the year."

Mr Gough said the seasonal nature of the business makes the half year result relatively meaningless.

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