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Seeka Announces Record Profits

Seeka's 2004 Annual Report highlights record profits

Improved kiwifruit volumes coupled with high export prices, contributed to record profit levels, says Seeka Kiwifruit Industries Limited's managing director Tony de Farias.

Seeka Kiwifruit Industries Limited's 2004 Annual Report shows profit before tax reaching $4.65m – up 54% from 2003 – from a total revenue of $51.03m – up 19%.

“With global markets continuing to provide strong growth opportunities, our marketer Zespri once again succeed in securing exceptional fruit returns.

“Strong export prices coupled with our yield-driven orchard management practices, generated pleasing returns from our orcharding operations,” says de Farias.

“Our portfolio of leased orchards performed in the upper quartile for their growing zone, producing more than 3 million trays from harvest 2003, which generated significant fruit volumes for our post harvest operations.

“Although post harvest packing volumes only increased 5% to 9.57m trays, a focus on better asset utilisation and lower costs saw return on net assets reaching 12%. Significantly, there is room for further improvement on asset utilisation from the larger crop volumes being recorded from harvest 2004.

“To meet the growth in fruit supply from harvest 2004, Seeka enacted an extensive capital plan, including installing a prototype colour blemish grader to increase packing throughput, along with upgrading Seeka’s coolstorage capacity.

“With harvest 2004 largely complete, Seeka became the first company to process more than 10 million trays of export kiwifruit in a season, with total volumes expected to hit 11.8 million trays. Fittingly this comes as the kiwifruit industry celebrates 100 years since the first fruit were planted in New Zealand. Seeka took this opportunity to celebrate our association with those who planted the first vines, built the first packhouses, and exported the first fruit from the Bay of Plenty.

“Our industry is supplying the world with a highly-valued and nutritious fruit, and along the way we’ve developed one of the most vibrant and productive rural communities in New Zealand.

“Seeka’s listing on the NZAX during 2004 is providing investors with a unique opportunity to profit from all sectors of the kiwifruit industry. Our recent investment in Vital Foods Distribution Limited, which owns and markets the Digestezy™ range of kiwifruit-based nutraceticals, is our latest step in exploring profitable growth options.

“As new plantings come into production, and our industry continues to take advantage of a single-desk marketing system, Seeka will be undertaking further capital improvements in time for harvest 2005. At the same time we will be appraising new opportunities to grow shareholder value.

HYPERLINK "http://www.seeka.co.nz/pdf/seeka_a_r2004.pdf"click here for the full Annual Report

HYPERLINK "http://www.seeka.co.nz/images/de_farias_seeka_md.jpg"click here for high resolution photo of Tony de Farias

Background Information

Processing more than 14 per cent of New Zealand’s total kiwifruit production, Seeka is New Zealand’s largest integrated kiwifruit supplier servicing the Bay of Plenty’s major growing regions of Te Puke, Tauranga and Katikati.

For harvest 2004, Seeka employed more than 1200 people to get 11.8 million trays of kiwifruit picked, packed, stored and then shipped to Zespri’s international markets.

Seeka’s outstanding record for corporate governance, plus transparent business processes, lead to Seeka being selected for the NZAX First XV – as one of the first 15 companies to be listed on the NZAX.

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