KEY POINTS:
Larger loyalty payments introduced to help kiwifruit growers reeling from last year's heavy fruit losses have slashed Zespri's full year result by nearly 20 per cent.
The monopoly kiwifruit marketer yesterday reported an 18 per cent fall in net profit for the year ended March 31 to $21.7
million from $26.4 million the year before.
The company blamed a 150 per cent surge in loyalty payments to growers for the period to $20.4 million, from $8.2 million, for the fall.
However an extra $77 million was returned to the industry, with fruit and service payments rising 13 per cent from $577.2 million to $654.3 million.
Global kiwifruit sales totalled $1.143 billion, up 15 per cent from $991.3 million on year earlier.
Zespri spokeswoman Melanie Palmer said the company's currency hedging policy meant foreign exchange had a positive effect, with the impact of the dollar against key currencies only felt in the last few months of the year.
However, she expected the high dollar to have a significant impact on returns this season.
Zespri introduced the "enhanced loyalty premium" in 2006 "to better share profits with growers", Palmer said.
"It's about continuing to get the balance right between sharing results of the single desk structure with growers."
The level of the enhanced loyalty premium could change next season but this would not be significant, she said.
The company also blamed the high levels of fruit loss - estimated to have cost the industry more than $50 million - for a 3 per cent decline in New Zealand-sourced kiwifruit volumes to 80.1 million trays sold.
But it said wharf checks had helped keep fruit in New Zealand that was not up to export standard, protecting Zespri's reputation abroad.
Meanwhile the volume of fruit sourced outside New Zealand had grown 60 per cent.
"Offshore is a huge part of our business now," said Palmer. "We're growing 560 hectares of Zespri Gold in Italy and in smaller volumes in other locations.
"It's about securing shelf space for Zespri products 12 months of the year."
Palmer said a review by NZ Kiwifruit Growers at the end of last year had found that delayed harvesting and inadequate post harvest temperature management were among reasons for the high fruit losses.
"The industry has responded really well and a lot of post-harvest operators have increased their spend on cool storage and other aspects to retain labour throughout the season."
Zespri said it would declare a final dividend for payment in August of 32c per fully paid share, in addition to the interim dividend (paid in December 2006) of 50c per share, bringing the total dividend to 82c per share, or 100 per cent of available profits.
