New Zealand agribusiness Scales Corporation has posted a record net profit of NZ$38.2m in the year to 31 December 2016, up 6 per cent on the 2015 financial year.
The parent company of grower-packer-exporter Mr Apple also set new records in its 2016 underlying profit, up 11 per cent to NZ$38.6m, and underlying EBITDA of NZ$67.9m, up 11 per cent.
The company’s horticulture and food ingredients divisions drove the record financial performance, boosted by a strong apple export season.
Its own-grown apple crop was a record 3.55m TCE (Tray Carton Equivalent), reaching the company’s 2020 target four years early.
The past year also saw Scales acquire Hawke’s Bay grower-packer-market Longview, adding 39ha of orchards to its business, as well as packing and coolstorage facilities.
Andy Borland, Scales managing director, said the company had made good strategic progress, including welcoming China Resources as a strategic shareholder, increasing Scales' shareholding in apple marketing business Fren Ridge to 73 per cent, and acquiring Hawke's Bay apple grower-packer-marketer Longview.
“[Longview’s] plantings are complementary to our Asian and Middle East consumer focus,” he said in a NZX statement released 28 February. “During 2017, Longview sold approximately 62 per cent of its apple crop to this region. In additional, Longview’s packing and coolstorage facilities ideally complement our existing post-harvest facilities. The Longview operations are located nearby, providing opportunities to improve post-harvest specialisation as well as increasing overall group-wide capacity to meet expected production growth.”
The Scales horticulture division underlying EBITDA grew 13 per cent to NZ$45.3m, driven by its increase in export volumes following a strong export packout of good colour, size and taste qualities, Borland said.
Looking ahead, Scales said there are early indications of a positive apple season, with good Brix, colour and fruit sizing, with a forecast EBITDA of NZ$55m to NZ65m for the 2017 financial year.