Select Harvests reported a soft full year result, despite a better than expected harvest and pricing. The company is said to be facing another challenging year ahead, as the almond producer faces stagnating pricing and high costs.
A 29,000 ton crop in FY22 saw the company report an 8% year-on-year revenue decline to $199.7 mln and a 32% operating earnings decline to $40.4 mln. The final crop and realized almond pricing was higher than the company had anticipated, but higher production costs, including elevated growing, drying and processing costs, as well as wet weather, impacted on the result.
Some of these headwinds are expected to linger into the new fiscal year, with a number of key factors underpinning a softer outlook. Firstly, recent wet weather events add downside risk to the company realizing its 30 metric ton crop target in FY23. Secondly, prices remain at cyclical lows driven by softening demand. Thirdly, the company anticipates a significant step up in fertilizer and chemical costs over the coming year, which could drive a -$20m headwind.