Zespri forecasts jump in annual profit as it seeks to maintain value in 'challenging' market
By Tina Morrison
Sept. 5 (BusinessDesk) - Zespri Group, the country's kiwifruit export marketing body, expects profit to surge higher in the coming year as it grows volumes and seeks to maintain values in "challenging" markets with higher volumes of low-priced fruit.
The Mount Maunganui-based company reaffirmed its forecast for net profit of between $175 million and $180 million in the year ending March 31, 2019, up from $101.8 million last financial year. It expects to pay a dividend per share of $1.35-to-$1.40, up from 76 cents per share last season.
“This season is about delivering growth in volume while sustaining as much value as we can and our teams are working hard to make this happen," Zespri chief executive Dan Mathieson said in Zespri's Kiwiflier industry newsletter.
"Market conditions have been quite challenging with higher volumes of low-priced fruit in many markets. However, the season has a way to go and we are building momentum through our marketing campaigns to stay on track, drive sales and sustain our run rates,” he said.
The kiwifruit industry has rebounded after developing new varieties which were resistant to the Pseudomonas syringae pv actinadiae bacteria, better known as PSA, which was discovered in New Zealand in 2010, and severely impacted the industry.
Zespri expects green kiwifruit to return $5.47 per tray in the 2018/19 season, down from $6.71 last season, while the average per-hectare return is forecast to increase to a new record of $64,455 from $59,981.
The Zespri organic green variety is forecast to return $8.67 per tray, down from $8.93, with the average return per hectare lifting to $69,663 from $52,375.
Its sweeter green variety, known as Green14, is forecast to return $6.85 per tray, up from $5.61 last season, with the average return per hectare lifting to $43,876 from $38,937.
Meanwhile, Zespri forecasts SunGold fruit will return $10.28 per tray, up from $10.07 a tray last season, with the average return per hectare rising to $138,973 from $114,345.
Zespri shares last traded at $7.95, having changed hands between $6.35 and $9.25 over the past year. The shares began trading on the USX trading platform in February 2016 and can only be owned by growers.