Zespri volumes, returns grow

31 August 2016

2015/16: Zespri volumes, returns grow

Zespri’s Annual Meeting today recapped the strong 2015/16 season for the kiwifruit industry – record sales and highest-ever total grower returns – as well as charting the industry’s future as the government approves amendments to the Kiwifruit Regulations.

2015/16 season recap

Zespri Chairman Peter McBride explains total sales revenue for the season grew to hit a record high of $1.9 billion, up 22 percent from the previous season. The total fruit and service payment to growers for New Zealand-grown fruit also grew 22 percent on the previous year to $1.143 billion, with average return per hectare reaching a record $60,758.

“Sales volumes were up 21 percent from the previous season, with sales of 131.6 million trays in the 2015/16 season. This included sales of 117 million trays of New Zealand-grown kiwifruit– nearly 22 million trays more than the previous year – and 14.5 million trays of non-New Zealand kiwifruit,” says Mr McBride.

Zespri’s corporate net profit after tax in 2015/16 was also strong, increasing by $1.2 million to $35.8 million, with a final full-year dividend of 24 cents per share. This was partly attributable to the release of a $13 million provision for matters relating to Zespri’s subsidiary in China, ZMCC, which are now resolved and income from licence fees. The normalised profit after tax is $27.8 million (compared to normalised profit of $21.5 million last year).

KISP and Kiwifruit Regulations amendments

Mr McBride also said that the industry was encouraged to see the progress made in implementing the recommendations of the Kiwifruit Industry Strategy Project or KISP. “The changes that New Zealand growers overwhelming voted for through KISP have been agreed by government and will ensure our industry keeps providing growth and value to growers and shareholders over the long term,” says Mr McBride.

Through extensive consultation over the past few years, the industry asked the government to amend the regulations to allow for better shareholder alignment with production, update the definition of Zespri’s core business and provide the regulator Kiwifruit NZ with a broader skill set and more independence.

“We’re pleased that the government has agreed to change the regulations to allow these three changes, which ensure that New Zealand kiwifruit growers continue to own and control Zespri into the future.”

These regulatory changes are part of a broader package of initiatives agreed by the industry. Other changes either implemented or underway include the formation of a National Maori Growers’ Forum, a new proactive approach to collaborative marketing and an improved share trading platform for Zespri shares.

Highlights of the 2015/16 season

Other highlights of the season covered at the Annual Meeting were:

• The record volume of SunGold of 27.5 million trays (from total New Zealand gold volume of 32.6 million trays) sold in excellent time with positive customer and consumer feedback, earning an average return for the gold pool of $8.21 per tray.

• The record per hectare Green return of $56,673 (up from $53,884 last year) driven by a reduced per-tray return of $5.13 (down from $6.01 last year) and very strong average orchard yields of 11,048 trays a hectare, up from 8,972 trays per hectare in 2014/15.

• Continued investment in Zespri’s Northern Hemisphere production to grow SunGold supply alongside the growth in NZ volumes. Volumes of 2.3 million trays of SunGold were sold from a total gold Zespri Global Supply (ZGS) volume of 3.6 million trays, with gold volume set to nearly double next season.

Looking ahead

Zespri Chief Executive Lain Jager reflects on a satisfactory result for 2015/16. “Each season brings its own challenges and opportunities and we remain focused on consistently delivering our strategy over time and staying on track to provide the world’s best portfolio of kiwifruit 12 months a year.

“For the 2016 season and beyond, Zespri will focus on growing demand ahead of supply as our volumes grow strongly and growing our share of the market with a premium price positioning.

“After a late start to the 2016 season with delayed maturity, we’re pleased to report that weekly sales run rates have now surpassed last year’s sales and we’re on track to sell 82 million trays of Zespri Green and 47 million trays of Zespri SunGold of NZ-grown kiwifruit. The strong positive response from customers and consumers around the world is very encouraging as we seek to further establish SunGold in new and developed markets,” says Mr Jager.

ENDS

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