Zespri’s net profit for the 2017/18 season increased 38 per cent year-on-year to NZ$101.8m, despite an 11 per cent decrease in the volume of New Zealand kiwifruit sold.
Announcing the performance this morning (23 May), the single desk marketer said the result was primarily driven by revenues from the release of 400ha of SunGold licence in 2017, as part of Zespri’s continuing programme to fulfil strong consumer demand.
The total fruit and service payment to growers increased by 6 per cent to NZ$1.47bn, while Zespri’s global kiwifruit sales for the year were also up 6 per cent at NZ$2.39bn. Total revenue, which includes licence income, was NZ$2.51bn.
“We sold a record volume of SunGold while growing returns at both per-tray and per-hectare levels,” explained Zespri chairman Peter McBride. “Supply of Green and Organic Green reduced considerably from the exceptionally high volume of the previous year.”
Despite the drop off, McBride said Zespri delivered a good sales result for Green, with the average per-tray return considerably stronger at NZ$6.71, up from NZ$4.36 in 2016/17.
“This was supported by good quality and low rates of onshore fruit loss. The average per-hectare return for Green across the industry was $59,981, a new record for the category, and the result was achieved in spite of a 27 percent decline in average yields.”
Meanwhile, the strong result for SunGold provides Zespri with further confidence for its long-term outlook, with the average return per tray rising to NZ$10.06, up from NZ$8.64 the previous season.
“Zespri achieved a strong increase in returns at the same time as continued growth in volumes,” McBride said in reference to SunGold. “Sales volume for the total Gold category rose by 9 per cent to 52.1m trays and the average return per hectare across the industry was up 16 per cent at NZ$114,345.”
The Organic Green return per tray was NZ$8.93, up on NZ$6.86 in 2016/17, reflecting increasing demand in Europe and other major markets, while Zespri sold just over 1.2m trays of Sweet Green.
The total dividend returned to shareholders was NZ$0.76 cents per share, versus NZ$0.25 per share in the previous season. The payout included an additional interim dividend of NZ$0.50 per share to distribute the majority of funds generated through the 2017 SunGold licence round.
“The 2017/18 season represents good progress and outstanding work by the Zespri team,” said Zespri CEO Dan Mathieson. “We are now looking forward to growth in volume.
“We are anticipating record production of New Zealand and non-New Zealand kiwifruit this year driven by increasing supply of SunGold and a recovery in supply of Green.”