T&G says new season apple export volumes are looking strong. Photo / Paul Taylor
As signalled, cyclone-battered fresh-fruit producer T&G Global has turned in a FY23 loss before tax, which, at $64.2 million, is around the middle of a guidance range issued earlier this month.
The offshore-owned, NZX-listed apple exporter reported a net loss after tax of $46.6m, compared to a $900,000 net loss the previous year.
In FY22 the company posted a before-tax loss of $3.3m.
Revenue was $1.33 billion, a nudge up from $1.3b in FY22. Operating loss was $45.6m, down from $20.4m the previous year.
Earlier this month, the company, formerly Turners & Growers, forecast a FY23 loss before tax of between $60m and $67m, about double that of its assessment and forecast after Cyclone Gabrielle’s damage a year ago.
That initial assessment, it said, was based on cyclone damage losses and the expected insurance recovery. In the statement to the NZX earlier this month, the company said the main reason for the change was the complexity of the insurance claim from the February 2023 cyclone damage, which caused delays in finalising the value of the insurance claim receivable at balance date.
Group global chair Benedikt Mangold said the loss reflected the cyclone’s physical and financial impact and a challenging year of growing and economic conditions.
“After three seasons of Covid-19-related disruptions, we came into the 2023 financial year focused on converting increasing demand into higher sales volumes. But the weather had other ideas.
“The February cyclone completely disrupted our apples operations in Hawke’s Bay for five days, destroyed orchards on some 13 per cent of our planted hectares and interrupted our supply chains for export and domestic crops. The cyclone, along with five-year highs in rainfall and lows in sunshine across the year, made conditions more than challenging.”
But progress within the business and the strength of its strategy had not been undermined by the challenges, Mangold said.
“The impact will add at least 18 months to our strategy’s delivery, but it did not destroy its strong foundations or our confidence that we are on the right track. This meant we were able to keep achieving several positive milestones, despite lower volumes, financial constraints and some challenging growing conditions.
“The confidence of BayWa AG, T&G’s ultimate parent company, in the strategy and its delivery was demonstrated by its willingness to provide a $24m subordinated facility to support cyclone recovery work and working capital through the year,” he said.
Chief executive Gareth Edgecombe said the strategy guided priorities in the post-cyclone “chaos” and led to milestone achievements such as a fast-start programme to get Envy apples into high-value Asian markets as quickly as possible following the March harvest.
Apples revenue increased year-on-year by 3.2 per cent to $799m. Operating profit in apples was $10.6m compared to $27.8m in 2022.
New Zealand apple export volumes were 4 million TCEs, down from 5.2 million TCEs in 2022. US apple volumes for 2022-2023 were 4.4 million TCEs compared to the prior year’s 4.1 million TCEs.
In 2024, the company is forecasting 2.9 million TCEs of New Zealand Envy apples will be exported, up from 2.2 million in 2023, as the first fruit comes off new plantings and trees continue to mature.
In Australia the business had been reorganised around its strongest categories of citrus, blueberries, grapes and asparagus, Edgecombe said. The Pacific Islands business had experienced strong trading with the post-pandemic return of tourism.
International trading revenue was $91.8m compared to $100.7m in 2022, with an operational loss of $5.1m compared to $2.6m in the prior year. This largely reflected the start-up costs and expected low initial yields from T&G’s Queensland blueberry farm, the company said.
T&G Global is 73.9 per cent owned by Germany’s Bay Wa Global. Hong Kong-based Wo Yang Limited is the second-largest shareholder with 19.9 per cent. The group has operations in 13 countries.