AI will be part of Scott Technology’s evolution, says CEO

Scott Technology's net profit fell in the first half.

Artificial intelligence (AI) will play a bigger role in robotics firm Scott Technology’s evolution, chief executive John Kippenberger says.

The company, which specialises in providing automated systems for the meat processing, mining and logistics industries, earlier reported operating earnings (Ebitda) of $17 million for the first half, up 14 per cent on a year ago.

Kippenberger said AI is already embedded in “almost everything” the company does.

Scott’s gear is used extensively by New Zealand meat processors Alliance Group and Silver Fern Farms, and in Australian processing plants, with a component of AI built into each machine.

“They are collecting millions of data points every day across a very large volume of sheep, and AI allows continuous learning for technology to continue to improve reference points, and that’s delivering a noticeable improvement in yield,” he said.

AI was also increasing accuracy.

“That means improved yield for the processor and better returns for the farmer as well, so that’s a positive indication as to how AI is delivering accuracy and efficiency.”

“It [AI] has been there for some time, but I think that the speed of change from AI is increasing, and that’s driving efficiencies, yield and quality outcomes at an increasing rate,” he said.

Kippenberger announced his resignation in March but will stay on with the company until August.

He will be supported by Aaron Vanwalleghem, Scott’s president for Europe and North America, while the company seeks a replacement CEO.

Scott, which is 53.05 per cent owned by Brazil’s JBS, last year undertook a strategic review of its ownership structure.

As part of the process, the company engaged with a group of potential buyers.

In November, Scott said no offers were received at price ranges which reflected the independent directors’ view of value for all of the company.

In its result, Scott said its net profit fell by 42 per cent to $4.5m due to one-off strategic review costs, higher lease and financing costs.

Group revenue was up 11 per cent at $141m, while margins were maintained at 26 per cent.

Looking ahead, Kippenberger said the American market was a mixed bag, with a drought in many parts of the country putting pressure on the beef sector, which meant processors were delaying capital investment decisions.

However, the company’s forward order book of $161m was positive.

Scott declared an interim dividend of 5 cents per share for the half year, up from 4 cents in the previous corresponding period.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.