A backlog of locally grown fruit in a number of T&G Global’s key pipfruit markets has contributed towards a mixed financial performance from the New Zealand-based group over the first half of 2017.
Although revenue climbed to NZ$501.6m for the six months ending 30 June 2017 – representing an 18.6 per cent increase from the same period last year – net profit came in at NZ$12.7m, sliding from NZ$22.7m in H1 2016.
Earnings from the group’s leading pipfuit division fell 40 per cent to NZ$11.8m over H1 2017, with T&G chairman Klaus Josef Lutz suggesting “weather events” had impacted on the volume and quality of fruit harvested from its New Zealand orchards.
“Inclement weather also affected third party growing partners in New Zealand and internationally, leading to an overall decrease in the volume of fruit available,” Lutz noted in the group’s half yearly report.
Lutz said the trade environment in a number of Northern Hemisphere pipfruit markets had also taken a toll.
“The group’s European and North American markets saw a delay in switching over to New Zealand supplied fruit, as locally grown fruit was available for a longer period,” he added.
The company’s international produce business took a hit, with revenue decreasing by NZ$7.1m to NZ$113m compared with H1 2016, while the segment’s operating profit came in at NZ$1m. Unseasonal weather conditions in Australia, New Zealand, and South America are said to have impacted on the volume and quality of T&G’s grape, blueberry, and asparagus crops in these countries.
“The group continued to invest in expanding its Peruvian grape growing operation and supporting the new offices in Thailand and Japan, and the group’s physical presence in these countries presents exciting growth opportunities,” Lutz explained.
T&G’s New Zealand produce division built on the success of its 2016 campaign, with revenue increasing by NZ$1.7m. Sales growth in the wholesale market and transport divisions made up for the revenue lost from the sale of the Fruit Case Company in June 2016.
“Operating profit is consistent with the same period last year, with a NZ$0.3m increase to NZ$4m, as revenue growth was offset by one-off costs such as the increase in transport costs associated with the Kaikoura earthquake,” Lutz said.