Zespri lifts grower payment despite fall in volume

Zespri said high prices more than offset poor growing conditions, allowing the kiwifruit marketer to increase this year's payment to growers by 6 per cent to $1.47 billion.

The increase was despite an 11 per cent fall in volume, brought on but an abnormally hot and cloudy 2016/17 growing season.

Zespri's global kiwifruit sales for the year to March 31 were also up 6 per cent, at $2.39b.

Total revenue, which includes licence income, was $2.51b.

Chairman Peter McBride said the result reflected strong consumer demand.

The grower-controlled company said it sold a record volume of "SunGold" kiwifuit while growing returns at both per-tray and per-hectare levels.

Supply of "green" and "organic green" fell sharply from the exceptionally high volume of the previous year, but strong consumer demand more than offset the impact on per-hectare returns for Green and mitigated the impact on Organic Green per-hectare returns.

Zespri's net profit after tax in 2017/18 increased by 38 per cent to $101.8 million - primarily driven by revenues from the release of 400 hectares of SunGold licence in 2017.

The total dividend returned to shareholders was 76 cents per share, versus 25 cents per share in the previous season.

The payout included an additional interim dividend of 50 cents per share to distribute the majority of funds generated through the 2017 SunGold licence round.

Sales volumes through the non-New Zealand supply segment, which enables Zespri to serve consumers with premium kiwifruit 12 months of the year, fell by 8 percent.

Supply of green was reduced because of a damaging frost in Italy, where it is grown under contract.

However, SunGold sales in Italy increased to offset the fall, with the Zespri Global Supply business recording total sales revenue of $264 million, up from $217 million in 2016/17.

The average per-tray return for green was considerably stronger at $6.71, up from $4.36 in the 2016/17 year, supported by good quality and low rates of fruit loss.

The average per-hectare return for Green across the industry was $59,981, a new record for the category, and the result was achieved in spite of a 27 per cent decline in average yields.

Sales volume for the total gold category rose by 9 per cent to 52.1m trays and the average return per hectare across the industry was up 16 percent at $114,345.

The average return per tray for gold was $10.06 (2016/17: $8.64).

The organic green return per tray was $8.93 (2016/17: $6.86), reflecting increasing demand in Europe and other major markets and an improved market mix.

The return per hectare fell 4 percent to $52,375 (2016/17: $54,427), impacted by a 26 percent decrease in average yields.