Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

2017/18 season: excellent market performance lifts returns

2017/18 season results: excellent market performance lifts returns

Zespri has delivered an increase in value to growers, despite a season in which the volume of New Zealand kiwifruit sold fell by 11 percent. The total fruit and service payment to growers increased by 6 percent to $1.47 billion. Zespri’s global kiwifruit sales for the year were also up 6 percent, at $2.39 billion. Total revenue, which includes licence income, was $2.51 billion.

Zespri Chairman Peter McBride notes the uplift in value reflects strong consumer demand and excellent market performance.

“We sold a record volume of SunGold while growing returns at both per-tray and per-hectare levels. Supply of Green and Organic Green reduced considerably from the exceptionally high volume of the previous year, but very strong consumer demand more than offset the impact on per-hectare returns for Green and mitigated the impact on Organic Green per-hectare returns.

“The industry’s performance during the last season reinforces our confidence in our strategy and potential for strong and sustainable growth.”

Corporate result: licence revenues boost earnings

Zespri’s net profit after tax in 2017/18 increased by 38 percent to $101.8 million. The result was primarily driven by revenues from the release of 400 hectares of SunGold licence in 2017, as part of Zespri’s continuing programme to fulfil strong consumer demand.

The total dividend returned to shareholders was 76 cents per share, versus 25 cents per share in the previous season. The payout included an additional interim dividend of 50 cents per share to distribute the majority of funds generated through the 2017 SunGold licence round.

Sales volumes through the non-New Zealand supply segment, essential in enabling Zespri to serve consumers with premium kiwifruit 12 months of the year, fell by 8 percent. Supply of Green was reduced because of a damaging frost in Italy. However, SunGold sales in Italy increased to offset the fall, with the Zespri Global Supply business recording total sales revenue of $264 million, up from $217 million in 2016/17.

Category result: Green and Gold returns increase

Mr McBride says that Zespri delivered a good sales result for Green. The average per-tray return for Green was considerably stronger at $6.71 (2016/17: $4.36). “This was supported by good quality and low rates of onshore fruit loss. The average per-hectare return for Green across the industry was $59,981, a new record for the category, and the result was achieved in spite of a 27 percent decline in average yields.”

The result for SunGold gives confidence in our long-term outlook, adds Mr McBride. “Zespri achieved a strong increase in returns at the same time as continued growth in volumes. Sales volume for the total Gold category rose by 9 percent to 52.1 million trays and the average return per hectare across the industry was up 16 percent at $114,345.” The average return per tray was $10.06 (2016/17: $8.64).

The Organic Green return per tray was $8.93 (2016/17: $6.86), reflecting increasing demand in Europe and other major markets and an improved market mix. The return per hectare fell 4 percent to $52,375 (2016/17: $54,427), impacted by a 26 percent decrease in average yields.

Zespri sold just over 1.2 million trays of Sweet Green. The average per-tray return was $5.61 (2016/17: $5.79) and the average per-hectare return was $38,937 (2016/17: $45,853). The per tray result was affected by a smaller crop profile and early season quality issues. The focus for the category remains on it being an early, high-taste offering to get the Green season off to a strong start.

Industry structure: a stronger foundation

Mr McBride says that the 2017/18 season also marked progress in strengthening the foundations of the industry, through how Zespri is funded and how Zespri is owned.

“Zespri shareholders backed changes to Zespri’s constitution in a Special Meeting in March 2018 to strengthen grower ownership and control of the company. The new constitution addresses a problem of misalignment between growers who supply kiwifruit to Zespri and people who own shares in Zespri and is critical for the stability of the industry structure. Shareholder support for change was an outstanding reflection of the cohesiveness of our industry and of a common interest among growers and former growers in seeing it prosper.

“The industry also agreed an enduring funding mechanism that ensures Zespri is funded appropriately, balanced against the need for cost control so that the benefits of economies of scale are shared between growers and shareholders.”

One result of the enduring funding agreement in 2017/18 is that Zespri has increased the loyalty premium paid to growers. This payment shares a portion of returns with growers who have long-term supply contracts with Zespri. The total premium last season increased by approximately 3 cents to 28 cents per tray supplied.

Outlook for 2018/19

Summing up, Zespri CEO Dan Mathieson says, “The 2017/18 season represents good progress and outstanding work by the Zespri team. We are now looking forward to growth in volume. We are anticipating record production of New Zealand and non-New Zealand kiwifruit this year driven by increasing supply of SunGold and a recovery in supply of Green.

“Our challenge is to continue to lift our performance by staying focused on improving the execution of our brand-led, consumer-focused strategy, supported by excellence in marketing and strong, connected partnerships with growers, suppliers, distributors and retail partners.”

ENDS

About Zespri Group Ltd

With global kiwifruit sales revenues of $2.39 billion in 2017/18, Zespri is one of the world’s most successful horticulture marketing companies and the Zespri brand is recognised as the world leader in premium quality kiwifruit. Based in Mount Maunganui, New Zealand, we are 100 percent owned by current or past kiwifruit growers, and employ over 500 people in New Zealand, Asia, Europe and the Americas.

On behalf of our 2,500 growers in New Zealand and 1,200 growers based elsewhere, Zespri manages kiwifruit innovation and supply management, distribution management and marketing of Zespri Green, Zespri SunGold, Zespri Organic, Zespri Gold and Zespri Sweet Green Kiwifruit.


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Mining: OceanaGold Announces Receipt Of WKP Mining Permit

MELBOURNE, Australia, Aug. 6, 2020 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the 'Company') is pleased to announce it has received the mining permit for Wharekirauponga ('WKP') on the North Island of New Zealand. ... More>>

ALSO:

Economy: COVID-19 Lockdown Has Widespread Effects On Labour Market

In the June 2020 quarter, the seasonally adjusted unemployment rate fell to 4.0 percent, down from 4.2 percent last quarter, while underutilisation rose, Stats NZ said today. More>>

ALSO:

NZ Post: New Research By NZ Post Shows Online Shopping Grew 105% In Alert Level 3

New research by NZ Post into how the COVID-19 response has impacted the way Kiwis shop online, shows online shopping increased 105%* when the country moved into Alert Level 3, and may have changed the way Kiwis shop permanently. Online spend peaked ... More>>

ALSO:

Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Waste: Government To Regulate Plastic Packaging, Tyres, E-Waste

The Government is stepping up action to deal with environmentally harmful products – including plastic packaging, tyres and e-waste – before they become waste. As part of the wider plan to reduce the amount of rubbish ending up in landfills, ... More>>

ALSO:


Antarctica NZ: Ice-Olation

Antarctica New Zealand is gearing up for a much reduced season on the ice this year and a very different deployment to normal! Before they head to one of the remotest places on the planet, all personnel flying south with the New Zealand programme will ... More>>

ALSO:

QV Valuations: July House Price Index Illustrates Market Resilience

According to the July 2020 QV House Price Index (HPI) results out today , property values recorded a marginal increase, up 0.2% over the month. This is somewhat of a turnaround from June, after the national index edged 0.2% lower. More>>

ALSO:

Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>

ALSO:

FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>

ALSO: