Improvements from its Australian earnings and a successful completion of 2016/17 New Zealand avocado season have helped Seeka record higher net profits over the past six months.
Delivering its stakeholder update, the company revealed its net profits after tax was $11.1million, an increase of 56 per cent on the previous corresponding period (pcp). Although forecasts remain unchanged of lower operational earnings, down by up to 15%, driven by lower Hayward volumes harvested and in store at 30 June (Week 27), which is down from 10.8m trays in 2016 to 6.6m trays in 2017.
Seeka is set to grow 31million kilograms of kiwifruit in New Zealand (8.5mil trays) in 2017. It will pack, store and export more than 92million kilos of Kiwifruit domestically (25.5million trays), 2.7 million kilos of avocados and produce, handle and sell 2.5million kilos of pears. In addition it expects to produce, handle and sell 3 million kilos of kiwifruit in Australia.
New Zealand post-harvest operations was $17.1million in earnings before interest, tax, depreciation and amortization (EBITDA), which is 24 per cent up on pcp, despite turnover being $3.6million lower. While its NZ retail services were 160 per cent up on pcp at $1.3million EBITDA thanks to the avocado market recording high volumes in the first half of the year, as well as a competitive banana market.
Seeka Australia had a significant increase in earnings, on the back of higher kiwifruit volumes, but lower nashi volumes as trees recover from hail and mites. It was up 127 per cent on pcp at $3.4million EBITDA. The company also had new revenue from its new venture, Delicious Nutritious Food Company, which recorded $200,000 EBITDA.
Returns from the Gold kiwifruit remain high, with improving volumes on long term lease orchards, leading to forecasts of $9.21 per tray and $120,000 per hectare. However it is not as good for Hayward volumes, which are down by 33 per cent, with forecasts of $6.06 per tray and $53,250 per hectare. The pcp was $4.26 per tray and $54,100 per hectare.
Seeka invested $13.2million over the past six months in infrastructure for future growth, in projects such as coolstores, the Seeka360 complex, NZ plant, property and equipment, as well as plastic bins.
The Australian arm of the company will also see $8million in investment from 2016 to 2020 in the orchard development programme, which involves new kiwifruit orchards and new varieties. $5.3m will be invested over the four years in infrastructure and equipment such as new packing machine, packhouse extension, coolstores and orchard equipment. Seeka's pear production will also be boosted with re-grafting of European root stock over to brown nashi, as well as new nashi plantings.
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