New Zealand fresh produce company Turners & Growers (T&G) says growth in the amount of business it is doing in Asia has put it on course to increase its overall profit margin and achieve better returns for apple growers.
The company, which includes topfruit exporter Enza and supplier-distributor Delica Group, said in its half-year report that apple growers' returns were forecast to be "a significant improvement" on last season's figures.
"Due to the group’s strengthened relationships with the Asian markets and robust volumes in all the major produce varieties, the Turners & Growers Group is heading towards an improved full year operational result over last year, accompanied by higher apple grower returns, providing a strong base for the future," said T&G chairman Klaus Josef Lutz.
The company revealed that its earnings before interest and tax had fallen slightly to NZ$12.64m (€8.03m) from NZ$12.87m (€8.17m) in the first half of 2011, although the actual profit it made during the same period was up 2 per cent to NZ$7.08m (€4.5m). Operating profit was down from NZ$12.1m (€7.68m) to NZ$10.61m (€6.74m).
The lateness of this year's New Zealand apple season meant that fruit was "significantly smaller than average" and resulted in lower volumes being packed, the report said, although the group's branded varieties fared better.
"It was pleasing to see volumes of Jazz and Envy reach pre-season forecasts while most other varieties fell well short," the company said. "Quality and pack-outs have been high."
All major markets have performed well so far this year, it continued, delivering "a significant lift in prices".
Exchange programme
Elsewhere, the introduction of a new management system for foreign exchange exposure has apparently enabled T&G to benefit from improved market prices, despite what it described as the New Zealand dollar's relentless upward trajectory, particularly against the euro.
The group's overseas programmes have continued to expand, it said, with crops produced in the Northern Hemisphere last year said to have been very well received, achieving higher returns for growers than in the previous year.
"Apples from both New Zealand and North America are up in volume and have experienced an increase in sales prices in main markets," the report stated.
"New Zealand volumes, in particular to Asian markets, are 34 per cent ahead of 2011. Jazz continues to grow in volume to Asia, especially in Thailand and Hong Kong.
"Shipment of a significant commercial volume of apples to Japan has been positively received by the market and there has been increased volume sent to the Chinese market.
"Exports of table grapes and cherries to Asian destinations have markedly increased on 2011 volumes."
The newly formed import division of Delica in Australia, mainly involved in trading apricots, blueberries and kiwifruit, was also exceeding forecasts, it added.
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