Zespri reaps record $1.9m revenue

Zespri chief executive Lain Jager is enjoying a bumper year for the kiwifruit organisation. Photo/file

Kiwifruit exports achieved record sales revenues of $1.9 billion in 2015-16, up 22 per cent from the previous season, Zespri announced Wednesday at its annual general meeting in Tauranga.

However, Zespri's forecast for Green kiwifruit for the coming season reflects the downward price pressure created by larger volumes.

The 2015/16 season saw the highest-ever return to growers, with $1.143 billion in fruit and service payments, also up 22 per cent on the previous season. The total fruit and service payment to growers for New Zealand-grown fruit also grew 22 percent on the previous year to $1.143 billion, with average return per ha reaching a record $60,758.

Zespri chairman Peter McBride said total volumes were up 21 per cent from the previous season, with sales of 131.6 million trays in the 2015/16 season. This included sales of 117 million trays of New Zealand-grown kiwifruit - nearly 22 million trays more than the previous year - and 14.5 million trays of non-New Zealand kiwifruit, he said.

A record 27.5 million SunGold trays (from total NZ Gold volume of 32.6 million trays) were sold, earning an average return for the Gold pool of $8.21 per tray.

And despite a greatly reduced Green per-tray return of $5.13 (down from $6.01 last year), the season had a record per ha return of $56,673 (up from $53,884 last year), driven by very strong average orchard yields of 11,048 trays per ha , (up from 8,972 trays per ha).

However, the board told growers its forecast for the 2016/17 season would see Green per tray returns down to $4.21, at the bottom end of a range from $4.20 to $4.80, with an average per ha forecast of $51,568.

The forecast includes the effect of crop management of 5.3 million trays and reflects the impact of a record crop volume, with the gross submit volume increasing by 30 per cent over the last two seasons. Organic Green is forecast at $6.25 per tray, compared with the June range $6.40 to $6.90, with an average per ha return of $48,431.

The Gold return for 2016/17 is forecast at $8.27 per tray, around the mid-point of the June range of $8.00 to $8.50. The forecast average per ha return for Gold is $93,852.

Chief executive Lain Jager said Zespri would remain focused on growing demand ahead of supply as volumes grew strongly, and on growing its share of the market with a premium price positioning.

"After a late start to the 2016 season with delayed maturity, we're pleased to report that weekly sales run rates have now surpassed last year's sales and we're on track to sell 82 million trays of NZ Green and 47 million trays of NZ SunGold," he said.

"The strong positive response from customers and consumers around the world is very encouraging as we seek to further establish SunGold in new and developed markets."

Mr McBride said that the industry was also encouraged to see the progress made in implementing the recommendations of the Kiwifruit Industry Strategy Project, including
amendments to the regulations to allow for better shareholder alignment with production, update the definition of Zespri's core business, and to provide the regulator Kiwifruit NZ with a broader skill set and more independence.

Zespri Corporate Highlights in 2015/16 season included:

• Corporate net profit after tax (NPAT): $35.8 million (up $1.2 million)

• NPAT included: release of a $13 million provision for now resolved China legal matters, plus fee income from additional new Gold licence.

• Normalised profit after tax: $27.8 million (compared to normalised profit of $21.5 million last year).

• Full-year dividend: 24 cents per share.