Satara SMALL ONLY

New Zealand kiwifruit and avocado cooperative Satara has reported higher first-half net profit of €834,160 (NZ$1.7m), up 30 per cent on the year-earlier figure.

Satara's earnings of €1.8m (NZ$3.7m) before interest, tax and rebates for the six-month period to 30 June 2008 represented a 36 per cent improvement on the prior period and, according to the company, was largely due to a 'considerable improvement' in both its post-harvest and orchard divisions.

Total revenues during the first half of the year were up 3.7 per cent compared with the same period of last year at €18.7m (NZ$38.7m)

The cooperative is forecasting it will pack a total of 12.5m trays this year, a slight increase on 2007. This season’s volume includes a significant increase in fruit packed early in the season and, according to a statement issued by the group's directors, the overall quality of fruit supplied to the packhouse showed a marked improvement this year.

The increase in the cost of business inputs continues to be a challenge, the company added. 'Management was able to lessen the impact of these cost increases though efficient utilisation of labour and effective contracting for key utilities and other supplies,' it commented. 'This area of our business has been a focus for Satara and has contributed to the strong post harvest operating result to date.'

A new 400,000-tray controlled atmosphere coldstorage facility was successfully commissioned at the start of the season. As a result, during August and September Satara will pack approximately 2m trays of fruit that is presently stored in controlled atmosphere coldstores across the business.

The orchard division, meanwhile, reportedly produced 1.9m trays from leased orchards during the 2008 harvest. Across both leased and managed orchard activities Satara said it improved yields and crop profiles, a result driven by the company’s orchard management team and technical team.

'Current indications from Zespri are that fruit value returns will be higher than in the prior year as a consequence of both strong in market pricing and more favourable foreign exchange rates,' the statement continued. 'However the final result for the orchard division will be dependant on the actual fruit value realised, which will become known with more certainty over the next six months.'

This season has seen the expiry of the older style orchard lease arrangements, which at current fruit value returns have proved costly to the company. The financial impact of these older style leases will impact Satara for the last time in this financial year. Continuing risk management initiatives around leased orchard activity meant several of these older style lease arrangements were not renewed onto the new lease contracts.