Seeka hikes interim dividend as first-half profit almost doubles
By Paul McBeth
Aug. 26 (BusinessDesk) - Seeka Kiwifruit Industries hiked its interim dividend to shareholders as the first harvest from its recent Australian acquisition and record crops contributed to a first-half profit that almost doubled.
Net profit rose to $7.1 million, or 43 cents per share, in the six months ended June 30 from $3.7 million, or 24 cents, a year earlier, the Te Puke-based company said in a statement. Revenue climbed 39 percent to $134.2 million, and the board declared an interim dividend of 10 cents per share, payable on Sept. 29 to shareholders on the register on Sept. 22. That's up from 9 cents a share a year earlier.
The increased profit reflected "the successful completion of the avocado season, the commencement of harvest and selling of our Australian-grown produce and record kiwifruit volumes in New Zealand," Seeka said in commentary accompanying the result. "Higher New Zealand kiwifruit volumes have led to better earnings, but required significant investment."
Seeka foreshadowed the result in June when it said it handled record kiwifruit volumes in the latest packing season and signalled the benefits of from its purchase of Australia's Bunbartha Fruit Packers for A$22 million would start to show up. The shares climbed 6.2 percent to $4.78, having already gained 31 percent this year.
The company's Australian unit delivered $1.5 million of earnings before interest, tax, depreciation and amortisaton on revenue of $13.3 million, while its New Zealand orchards delivered a 13 percent gain in ebitda to $5.1 million on a 15 percent increase in revenue to $37.7 million.
Seeka's post-harvest business, which coordinates the local harvest, packing, coolstore and logistics for its growers, lifted earnings 25 percent to $13.8 million on a 30 percent gain in revenue to $78 million. The retail services division posted flat ebitda of $500,000 on a 24 percent increase in sales to $5.1 million.
The company wrote down the value of its 32 percent stake in UPNZ, which imports plastic pockets and distributes them to the local kiwifruit industry, by $340,000 due to the discovery of grease deposits on several packs destined for China that prompted fruit marketing agency Zespri International to put a hold on fruit in that packaging until it was cleared of food safety issues.
Seeka supplied Zespri with 212,153 trays in those pockets, 12 of which were contaminated with the grease, and Zespri has lodged a claim against the grower "for all the costs of checking that product including all fruit loss, irrespective of cause," the company said.
The kiwifruit grower is disputing the claim, but has taken a provision in its accounts, though didn't disclose the value saying it was commercially sensitive while the dispute was in progress.
Seeka will provide annual earnings guidance at an update in October when it said it will have greater certainty over fruit quality, kiwifruit selling prices, the completion of Australian fruit sales, and any final resolution to a fire insurance claim.