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Impaired banana business

Seeka's annual profit falls 44% on lower kiwifruit volumes

Seeka posted a 44 percent decline in annual profits as Australasia's biggest kiwifruit grower booked a $2 million charge on its banana sourcing unit while managing a decline in kiwifruit volumes.

Net profit fell to $5.8 million, or 34 cents per share in calendar 2017, from $10.4 million, or 62 cents a year earlier, the Te Puke-based company said in a statement. The year-earlier figure was bolstered by a $3.1 million gain on an insurance payment. Revenue fell 2 percent to $186.8 million.

"The steps taken by Seeka and outlined in this commentary led to a better profit from operations than forecast given the scale of reduction in New Zealand kiwifruit volume," chief executive Michael Franks and chief financial officer Stuart McKinstry said. "Seeka is anticipating a return to average Hayward (green) kiwifruit yields along with a steady increase in the Zespri SunGold volumes."

The fruit grower had predicted after-tax operating earnings to be within a plus or minus 5 percent range of $7.8 million, which it generated a year earlier, citing an improved performance across most of its divisions.

Seeka forecasts earnings before interest, tax, depreciation and amortisation to rise by 5-to-10 percent in calendar 2018 from $23.1 million in 2017.

The board declared a final dividend of 12 cents per share, payable on March 23 to investors on the register at the close of trading on March 16. That takes the total return to 22 cents for 2017, up from 20 cents a year earlier.

The shares fell 2.5 percent to $5.80.

Publication date: 2/23/2018


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