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ZESPRI announces half year profit of $24.9 million

26 October 2006

ZESPRI announces half year profit of $24.9 million

ZESPRI directors have announced a consolidated unaudited net profit after tax of $24.9 million for the six months to September 30, 2006. This is 10 percent down on the $27.8 million profit for the same period last year. Net global kiwifruit sales have increased by 10 percent to $818.7 million for the half, compared with $742.6 million last year. ZESPRI Chief Executive Officer Tim Goodacre said this was driven mainly by strong sales in market and the effect of a weaker New Zealand dollar.

“ZESPRI remains in a strong financial position. Sales and pricing in most markets are up, rounding off the end of the current sales season and signalling positive prospects for the 2007 season ahead,” said Mr Goodacre.

A full year profit after tax of $22.8 million is predicted, down from $26.4 million in the previous year. The seasonal nature of the global marketing of kiwifruit, with fewer sales occurring in the second half of the year combined with continuing fixed costs, sees a full year result that is lower than the half year.

Included within the forecast result is the addition of an enhanced loyalty premium payable to growers, which is expected to increase the total loyalty premiums paid to growers to $14.7 million from $8.2 million last year. The enhanced loyalty premium was added to the existing loyalty premium earlier this year to provide additional value to growers.

The Board intends to pay out 100% of available profits in recognition of another year of pressure on grower/shareholder cash flows with orchard gate returns at similar levels to last year. The company therefore intends to declare an interim dividend of 50 cents per fully paid share, payable in February 2007 and subject to ZESPRI Group Limited meeting solvency requirements.

ENDS

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