Scales lifts forecast after interim profit

By Paul McBeth

Record apple crop the standout performer.
The company's Mr Apple unit underpinned the result with exports up 12%. Picture / Glenn Taylor
The company's Mr Apple unit underpinned the result with exports up 12%. Picture / Glenn Taylor

Scales Corp lifted first-half profit 3 per cent and raised guidance for annual earnings as its Mr Apple unit delivered a record crop and met its 2020 export volume target four years early.

Net profit rose to $33.8 million, or 24c per share, in the six months ended June 30 from $32.8m, or 23.5c, a year earlier, the Christchurch-based company said.

Revenue jumped 30 per cent to $209.5m, while earnings before interest, tax, depreciation and amortisation increased 3 per cent to $54.2m. That performance was underpinned by Scales' Mr Apple unit, with apple exports up 12 per cent to a record 3.55 million TCEs (tray carton equivalents).

"This is an excellent achievement from the entire Scales team and especially the Mr Apple team, which has delivered another record crop on existing resources and infrastructure," said managing director Andy Borland.

New Zealand's biggest apple exporter doubled its annual profit in 2015, selling higher value products to key markets in Asia and the Middle East.

In December, Scales said that result wasn't likely to be repeated citing an absence of insurance proceeds from a hailstorm last year and some provisioning for reduced use of its coldstore network.

Scales yesterday said it expects ebitda of between $55m and $62m in the calendar year, up from a previous forecast of $48m to $55m. Net profit is expected to be between $29.6m and $34.6m.

The company's horticulture unit increased profit 4.7 per cent to $36m on a 39 per cent jump in revenue to $130.7m, while its food ingredients business boosted sales 38 per cent to $31.1m for a 36 per cent gain in profit to $4.6m.

The storage and logistics division boosted external revenue 6 per cent to $47.4m, while profit slipped 12 per cent to $9.2m.

Borland said its new Auckland coldstore was trading profitably and ahead of expectations though "industry headwinds" weighed on earnings.

Scales' board will consider an interim dividend payment later in the year. The shares closed down 22c yesterday at $3.28.

- BusinessDesk

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