Gold cultivar boost for Zespri

Zespri says the 2015/16 season has resulted in the highest-ever total return to kiwifruit growers.

Bounce-back from Psa and success of Sungold aids record kiwifruit returns

Zespri has clocked up another record year for returns, partly reflecting a strong rebound from devastating effects of the Psa outbreak in 2010, but also robust demand for the relative newcomer to the kiwifruit scene - gold.

The industry was hit particularly hard by the virus outbreak but it has since bounced back, due in no small part to the advent of the Psa-tolerant gold cultivar, Gold3, which is marketed as Sungold.

Grower-owned Zespri, which markets kiwifruit to the world outside Australia and New Zealand, said the 2015/16 year resulted in the biggest-ever total return to growers, highest-ever return per hectare for "green" and record sales volumes for both green and gold varieties.

News of the result coincided with that of New Zealand's bigger-than-expected trade surplus in April, driven by increased volumes of gold kiwifruit and apples, which helped to offset a downturn in dairy prices.

Zespri's sales hit $1.9 billion in the year to March 31, up 21 per cent on the previous year's.

The total fruit and service payment to growers for New Zealand-grown fruit increased 22 per cent on the previous year to $1.143 billion, with average return per hectare reaching a record $60,758.

Zespri sold 131.6 million trays in the 2015/16 season, up 21 per cent on the previous season. New Zealand-grown kiwifruit sales hit 117 million trays -- nearly 22 million trays more than the previous year.

The record per hectare green return of $56,673 was driven by a reduced per-tray return of $5.13 (down from $6.01 last year) but very strong average orchard yields of 11,048 trays a hectare, up from 8972 trays per hectare last year.

"Across the industry, New Zealand kiwifruit growers have responded year-on-year to the challenge of growing in a Psa environment by improving orchard management practices," said chairman Peter McBride.

That and favourable weather last season resulted in a very large green crop of 80.7 million trays.

Chief executive Lain Jager said he expected the next few years to continue strongly in terms of volume, but that production would then start to level off. Jager said there was no doubt the rebound from the dark days of the Psa virus was still playing a big part in the sector's performance but that the days of double-digit volume growth would soon end.

"We would have no intention of maintaining this sort of growth," he said. "We will do another 15 per cent this year but it will probably start to tail off."

The growth is occurring mostly in the gold business. Before Psa hit, gold production was 27 million trays. Jager said this year it would be close to 47 million and in the following years it would get to about 60 million trays.

Jager said confidence in the sector has been reflected in orchard prices -- a green orchard goes for $350,000 per hectare and more than $500,000 per ha for orchards growing gold.

At a corporate level, Zespri's net profit increased by $1.2 million to $35.8 million. The Zespri board plans to pay a final full-year dividend of 24c per share but the dividend will not carry imputation credits.

The season's profit and the increase in dividend was partly attributable to the release of a $13 million provision entered for matters relating to Zespri's subsidiary in China, ZMCC, which have now been resolved with the Shanghai Court, as well as receipt of licence fee income during the year.

Removing the effect of this exceptional factor, Zespri's normalised profit after tax was $27.8 million compared with a normalised profit of $21.5 million last year.