EastPack reports $10.5 million profit for 2010

EastPack reports $10.5 million profit for 2010

With the 2011 kiwifruit season under way, grower-owned post harvest kiwifruit operator EastPack has reported another strong financial performance for the 2010 financial year, with a $10.5 million profit before tax and rebates – up 22 percent from $8.8 million from the previous year.

The positive performance sees EastPack, the second biggest kiwifruit post harvest operator in New Zealand and the leading supplier of Gold kiwifruit, increase its grower rebate from 25 cents per tray in 2009 to 30 cents per tray in 2010, and increase the dividend per share from 14 cents to 15 cents before tax.

EastPack Chairman Ray Sharp attributed the company’s strong 2010 financial performance to its focus on operational excellence and increasing production capability and capacity.

“Three years ago we made a strategic decision to invest in the world class LEAN Manufacturing processes, and each year since we have seen improved efficiencies and a reduction in waste, which in turn has helped us to maximise our financial performance and returns to our grower shareholders,” Mr Sharp said.

“The hard work and professionalism of all EastPack staff has enabled us to consistently grow the business over many years and increase production capability and capacity. I thank them and our growers for their support.”

EastPack expects to pack around 19 million Class 1 trays this season – up from 16.8 million in 2009. The Orchard Gate Return (OGR) to EastPack growers has a consistent history of being one of the highest in the industry and 2010 was no different.

“EastPack analysis shows that our OGR for 2010, for both Green and Gold, are the best in the industry, if you include our rebates. This is a very pleasing result and what we have strived to achieve in our vision to be ‘World Class from Orchard to Market’,” Mr Sharp said.

EastPack is investing $6 million this year in new coolstores and fruit handling equipment to handle an anticipated increase in volume of Green and Gold kiwifruit from its growers this season. Two new coolstores in Te Puke and one new coolstore in Edgecumbe are nearing completion. This is in addition to last year’s $9 million investment in a new state of the art semi-automated fruit grader and sizer in the Te Puke site as well new coolstores.

Mr Sharp attributes the expected increase in volume to productivity on the orchard, as well as growers moving their allegiance to EastPack due to its financial performance and service to growers. Although he says the outbreak of Psa in 2010 sent the industry into shock, and is a potential threat to industry growth.

“All growers face the uncertainty brought by this devastating disease and we will be working with our growers and with the industry’s bodies to do what we can to help minimise the impact and ensure a sustainable future for EastPack, our growers and our staff,” Mr Sharp said.

The EastPack AGM will be held on 20 April 2011. For more detailed financial results, go to www.eastpack.co.nz.

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