Zespri indicates early profit range for 2017 season

Zespri indicates early profit range for 2017 season with upside from looming tender

By Fiona Rotherham

April 21 (BusinessDesk) - Kiwifruit marketer Zespri International has indicated an after-tax profit of $25 million to $30 million for the 2017 financial year, excluding revenue from the release of 400 hectares of Gold3 licence being tendered next month.

That additional revenue will likely be materially significant to the 2016/17 corporate profit, it said in a statement to the Unlisted trading platform.

Zespri also released a broad first indicative projection for orchard gate returns (OGR) for the 2016/17 season just underway, reflecting the significant uncertainty at this stage.

The forecast OGR for the mainstay Zespri Green variety is $4.20 to $5.20 per tray which compares to a February forecast for the 2015/16 season of $4.94 which will be confirmed next month.

Zespri Green14 and Zespri Organic are forecast at $6 to $7 per tray for this season compared to $6.94 and $6.98 respectively for the previous season.

Zespri Gold shows the most potential upside with a $7.80 to $8.80 per tray OGR compared to a forecast $7.96 per tray for the 2015/16 season.

The Zespri board had already increased its profit forecast for the March 31, 2016 financial year by $13 million to a range of $32 million to $35 million after being assured it no longer needed to hold a provision in its accounts relating to the under-declaration of customs duties by a Chinese subsidiary between 2008 and 2010.

Zespri still has 1.7 million trays of kiwifruit on hold after it was potentially affected by an oil leak in packaging at a Chinese supplier earlier this month.

A spokesman said it was still assessing measures and the feasibility of inspecting, re-checking and re-working each of the potentially affected trays or simply ditching them.

The amount of affected kiwifruit in the precautionary hold represents around 1 percent of its total forecast volume of 140 million trays for the 2016 season.

(BusinessDesk)

© Scoop Media