Continued growth in its core markets has propelled Zespri to a strong financial performance over the 2019/20 season.
The New Zealand-headquartered kiwifruit marketer posted a net profit of NZ$200.8m over the 2019/20 campaing (12 months to 31 March 2020), up from $179.8m in 2018/19.
Zespri’s total operating revenue was NZ$3.36bn in 2019/20, up from NZ$3.14bn a year before, with global revenue from fruit sales increasing by 7 per cent year-on-year to NZ$3.14bn. This was based on the sale of 164.4m trays of New Zealand and non-New Zealand-grown kiwifruit, a 2 per cent reduction on 2018/19.
Total fruit and service payments, which are returns direct to the New Zealand industry, increased by 8 per cent year-on-year to NZ$1.96bn. The Zespri board expects the total dividend for 2019/20 to be $0.94 per share, up slightly from $0.92 in 2018/19.
There were strong results across each of Zespri’s four fruit categories. The SunGold average return per tray increased to NZ$11.86, and the average return per hectare was a record NZ$161,660.
The average green per tray return increased to NZ$6.67, with the average per hectare return for green reaching a record high of NZ$67,295.
Organic green reached an average return per tray of NZ$9.88, while Sweet Green achieved an average return per tray of NZ$7.66.
“Overall, 2019/20 was another strong year for Zespri with continued growth in our largest markets including Japan, Greater China and Europe,” said Zespri chief executive Dan Mathieson.
“Within our business, we’ve focused on creating more value and continuing to put consumers even more in the centre of our decision-making. We’ve also made excellent progress in building our business for the future and investing in the systems we need to continue to grow.”
Zespri celebrated a number of major milestones over the 2019/20 season, including the commercialisation of the Zespri Red variety, opening its new head office in Mount Maunganui, launching its new brand identity, and announcing revised sustainability targets.
Mathieson said Zespri had also made strong progress on delivering on its purpose of helping people, communities and the environment around the world through “the goodness of kiwifruit”.
“Across 2019/20, we invested significantly around the world as part of our efforts to strengthen communities. That saw us support food rescue charities, the training of lifeguards, a kiwi breeding programme, multiple scholarships and health charities,” Mathieson explained.
“We also launched the Zespri Young and Healthy Virtual Adventure, which will see us working with primary schools around the country to promote healthy lifestyles, and we helped support those most in need as part of our response to the challenge posed by Covid-19.”
Outlook for 2021
Despite global economic uncertainty emanating from the Covid-19 pandemic, Mathieson said 2020/21 is shaping up as another strong year for Zespri.
“The response from the industry to Covid-19 has been incredible, coming together to ensure we could get fruit off the vines and into market in spite of the restrictions both here and offshore,” he explained.
“This coming season is one of our best-ever tasting crops and largest by volume, albeit with smaller green due to the dry weather. Demand around the world is significant, driven both by Zespri’s investment in sales and marketing as well as by demand for safe, healthy foods which are high in Vitamin C.”
While some sales restrictions remain in place, including a ban on point of sale promotions in some markets, Mathieson said Zespri's marketing team had adapted well, with a greater focus on in-home media and the health benefits of kiwifruit.
“Risks to our outlook include wider concerns around consumer purchasing power being negatively affected by the global economic turmoil, changes to the normal flow of fruit trade and also potential disruption across our global supply chains,” Mathieson said.
“Zespri remains focused on ensuring we’re able to respond to such eventualities and on delivering returns to growers.”