Seeka nets $7.1m profit for first half of the year

Seeka has announced an unaudited net profit after tax (NPAT) of $7.1 million for the six months to June 30, 2016. Photo/file

Seeka Kiwifruit Industries has announced an unaudited net profit after tax (NPAT) of $7.1 million for the six months to June 30, 2016.

The NZX-listed company's result was up 92 per cent on the $3.4 million reported in the previous corresponding period (PCP). Seeka also announced an increased dividend of $0.10 per share, up from $0.09 per share in the PCP.

The result reflected the successful completion of the avocado selling season, the first year's business operations for Seeka Australia and record New Zealand kiwifruit volumes, the company said.

The half year results include one-off gains from discontinuing long term leases, which added $457,000 to the after tax result.

"Seeka handled record New Zealand kiwifruit volumes at 32 million trays," said chief executive Michael Franks.

"While these higher volumes have led to better earnings, they also required significant investment. The company invested $17.8 million in New Zealand ahead of the volume increase and the infrastructure was in place to deliver growers a timely harvest. Early fruit performance was good, particularly in the SunGold variety."

Mr Franks said Seeka was satisfied with the six month results and thanked staff, contractors, suppliers and growers for their efforts.

Key highlights included:
• the first harvest and sales programmes for Seeka Australia,
• significant infrastructure investment in the New Zealand core kiwifruit business,
• successful completion of the 2015/16 avocado selling season which delivered record returns to growers, and
• successfully managing and processing a record New Zealand kiwifruit crop.

Mr Franks said Australian operations had commenced profitably in their first season, with Seeka harvesting 580,000 tray equivalents of Australian kiwifruit, 1,432 tonnes of Nashi pears, and 1,791 tonnes of European pears. Australian operations were profitable with earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.52 million, delivering NPAT earnings of $660,000 for the half year.

"Our Australian earnings reflect a challenging first growing season, and we are learning about doing business in Australia and its environment," said Mr Franks. "We are very positive about our Australian business and its potential and are continuing to invest in its development."

Chairman Fred Hutchings said Seeka had delivered a timely harvest to growers, and facilities were fully utilised.

"Disciplined and professional planning ensured that Seeka had the capacity to handle its growers' fruit," said Mr Hutchings. He added that Seeka had a clear vision and strategy of striving to grow from its kiwifruit foundation and to deliver excellent performance to growers and returns to shareholders.

And while the Te Puke-based company focused on its core business and the integration of the Australian business, the strategy remained in place, he said.

"This strategy may see the company contemplate and action value accretive acquisitions or expand its geographical boundaries further. Seeka's vision remains to be New Zealand's premier produce business."

Seeka will provide guidance for the current trading year at its Stakeholder Update on 21 October.