By Gavin Evans
May 20 (BusinessDesk) - Grape grower Terra Vitae has warned earnings will be reduced by a poor harvest.
The company, which has vineyards in Marlborough and Hawke’s Bay, says that subject to final pricing, including extra payments for reserve grade wines, it will miss its harvest sales target by about 16 percent.
“This result is largely due to cold, wet conditions during flowering in Marlborough in December, followed by incredibly hot, dry conditions over the summer period, which resulted in lower volumes of approximately 17 percent against budgeted tonnage,” the company said in a statement on the Unlisted exchange.
“This will impact on the profit result for the year.”
Terra Vitae, 21 percent-owned by Villa Maria, gets more than 80 percent of its production in Marlborough where it has invested in water storage to improve the resilience of its operations there. The government declared a medium-scale drought there in March.
Last year, Terra Vitae produced 4,441 tonnes of grapes worth almost $8.5 million. Those volumes were 7 percent higher than the year before and 12 percent ahead of the firm’s budget. Sales were 10 percent higher than the year before and 6 percent ahead of target.
Terra Vitae shares last traded at 45 cents, giving the company a market value of $18 million.