Packing operations at Seeka
Te Puke-based Seeka Kiwifruit Industries Ltd has announced an after-tax profit of $2.7 million for the financial year ended December 2013, down on the previous year's $5.8 million.
However, Seeka chief executive Michael Franks said in the context of the downturn in the kiwifruit sector and tighter margins as a result of Psa, he was delighted with the result.
"We feel like we dodged a bullet," said Mr Franks. "We're reasonably satisfied with the result and certainly ahead of where we expected to be."
NZX-listed Seeka's guidance to shareholders in October last year anticipated a profit before tax of $1.7 million to $2.2 million, compared to the actual result of $3.3 million, while earnings before interest, tax, depreciation and amortisation came in at $9.9 million, compared to the guidance range of $8.2 million to $8.7 million.
The company reported earnings of 19 cents per share for the year, and at the year's end each share had a net tangible asset backing of $4.05 and on December 31 a market price of $2.10. The directors had reinstated the dividend, declaring a full year fully imputed dividend of 13 cents per share.
"We have to acknowledge that Zespri produced higher returns than were expected," said Mr Franks. "Also we've pushed into new areas like kiwiberries. And our Australian programme for Class 2 kiwifruit has been a good earner for growers."
Seeka also had a growing presence in avocados, where volumes rebounded to 334,000 trays, compared to 253,000 trays in the preceding year.
While still small compared to the 20 million trays of kiwifruit the company packs, the company saw it as a potentially important future source of earnings on both the grower and packing sides of the business.
While kiwifruit remained the foundation of the business, there was a realisation the company had to diversify. Mr Franks said the company had been pleased with its first crop of kiwiberries.
Overall revenue of $97.4 million was down 10 per cent on the $108.3 million in the preceding financial year, reflecting the drop in volume of Zespri Hort16A gold fruit.
The industry was optimistic that volumes would recover next year once the new disease tolerant Zespri G3 variety comes on-stream in 2015.
Seeka is the second-biggest post-harvest company after EastPack and earned more from its post-harvest operations than from the growing side of the business. But the post-harvest sector also represented a large investment in infrastructure.
In better years for the industry, Seeka was handling around 26 million trays annually, but with the downturn in volumes it was now processing about 20 million trays through the same infrastructure, said Mr Franks.
"We've all got more capacity that we've got crop and all of the post-harvest sector is competing around the edges," he said.
"It's going to be a challenging year ahead. But we're confident, the crop looks better than expected, and there's growing optimism that the new varieties are more tolerant and offer a pathway to the future."