Seeka sees annual profit growth of up to 11%

Seeka sees annual profit growth of up to 11%, planning for beefed-up capacity

By Paul McBeth

Oct. 22 (BusinessDesk) - Seeka Kiwifruit Industries, the country's biggest kiwifruit grower, sees annual profit growth of up to 11 percent and is planning to expand its capacity in coming years as kiwifruit crops recover from the outbreak of the Psa-V vine disease.

The Te Puke-based company forecasts net profit of between $2.6 million and $3 million in the 12 months ending Dec. 31, compared to $2.7 million in 2013, it said in stakeholder presentation slides published on the NZX. Earnings before interest, tax, depreciation and amortisation and before the cost of the share scheme are expected to be between $10 million and $10.5 million, up from $9.9 million last year.

The slides show the kiwifruit grower and coolstore and packhouse operator is predicting bigger kiwifruit volumes, primarily from the Psa-V resistant variety G3, and is evaluating options to expand capacity from 2016.

"Early financial planning indicates that Seeka can expand its capacity to meet kiwifruit demand within its current resources," the slides say.

Earlier this month, Seeka came out in support of a class action to sue the Ministry for Primary Industries over the outbreak of Psa-V seeking compensation for the devastation of crops across the Bay of Plenty. Seeka estimates the Psa bacteria has cost it more than $45 million, and prompted it to slash its workforce by 40 percent to mitigate the impact of the outbreak, which is still impacting on the kiwifruit grower and coolstore owner.

The company today said it is open to expanding its existing business and other complementary investment opportunities.

The shares fell 1 percent to $2.94 yesterday, and have gained 40 percent this year.

(BusinessDesk)

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