Seeka releases 2010 earnings

Seeka Kiwifruit Industries Limited has reported a profit of $12.7m before tax for the nine months ended 31st December 2010 — ahead of its NZX market guidance of between $11.5m and $12.5m. Revenue totalled $122.2m

Seeka has changed its balance date to 31 December to better reflect its business cycle and to simplify its accounts

Earnings before interest, tax, depreciation and amortisation (EBITDA) for the nine months was $19.6m, with operating cashflow of $26.0m providing for continued investment in plant and equipment ($7m for the period), and the maintenance of the company's dividend distribution policy.

Chief executive Michael Franks says the result reflects a better operating performance.

"Seeka's improved financial performance stems from the successful integration of the major Huka Pak acquisition during 2010. It is also due to our continued focus on costs, innovation and efficiencies, as well as our orcharding expertise which resulted in first-rate production from the company’s orchards."

“Seeka achieved its best-ever fruit loss statistics for Gold of only 1.3% compared to the industry average of 2.4%, with Green fruit loss of 4.4% inline with the industry.

"Our aim is that Seeka-handled fruit is synonymous with quality. Seeka continues to focus on cool chain efficiency and inventory management systems that enhance our ability to deliver fruit to the market at its best, and in turn delivering competitive revenues to our growers.

"Yields and returns from our long-term lease orcharding operations continue to be a highlight with 1.2m trays of Gold harvested along with 344k trays of Green. This fruit produced an average orchard gate return of $9.36 per Gold tray, and $4.36 per Green tray."

“We also have a portfolio of emerging businesses, including SeekaFresh, AvoFresh and Verified Lab services that have considerable potential for growth over the coming seasons.

"SeekaFresh is delivering premium-quality kiwifruit and avocados to Australian and New Zealand wholesalers and retail customers through an efficient supply interface.

"Seeka is well placed to meet future challenges due to our scale of operations, assets and dedicated growers. We have a history of performance and resilience, and have demonstrated the ability to adapt our business so that sustainable earnings are delivered to our shareholders."

PSA was discovered in Te Puke in November 2010. Since discovery the aggressive V (or Italian like) Isolate of the bacteria has been detected and poses a threat to the Kiwifruit Industry. In response Seeka is working with its growers and the Kiwifruit Vine Health Authority to implement an aggressive containment strategy to ensure the ongoing health of its growers vines. The impact of Psa was considered in relation to the value of Seeka’s long term lease orchards in the company’s accounts at December. However at that date no reliable estimate of the future financial impact, if any from the Psa outbreak could be made.

The annual shareholder meeting will be held 2:30pm, Wednesday 27 April, at The Orchard, 20 MacLoughlin Drive, Te Puke.

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