CORRECT: Zespri signals profit growth

CORRECT: Zespri signals profit growth, trims expected fruit and services payment

(Corrects share performance in fourth paragraph of story that ran June 19 to adjust for stock split.)

By Gavin Evans

June 19 (BusinessDesk) - Kiwifruit marketer Zespri is forecasting annual profit growth of up to 7 percent.

The firm, which markets kiwifruit on behalf of 2,500 New Zealand growers and another 1,200 in Italy, Japan, Korea and France, is expecting net profit of $182-$192 million in the current year, including licence release income.

That is up from the $179.8 million net profit reported for the year ended March, which was a 77 percent increase from the year before as the firm shipped more fruit for better prices. Total trays sold climbed 21 percent to 167.2 million last year – 85 percent of which was New Zealand-grown green or gold kiwifruit.

Zespri shares trade on the Unlisted market. They changed hands at $8.20 yesterday, up about 42 percent from a year earlier when adjusted for the firm's three-for-two stock split in March.

The latest earnings forecast comes despite a slight trimming of Zespri’s expected New Zealand fruit and service payments.

It is projecting total fruit and service payments of $1.75-$1.85 billion in the year ending March 2020, excluding loyalty premia. That is $25 million less than the firm signalled in its first forecast in April, but in line with the $1.82 billion reported in the year ended March.

Zespri is expecting green fruit to return $5.50-$6.50 a tray at the orchard gate this season, up from the $5.20-$6.20 signalled in April, and the $5.45 achieved last year.

Gold fruit is expected to earn $10.20-$11.20 per tray, up from the $9.70-$10.70 signalled in April and against the $10.89 achieved last year.

Organic green fruit, which accounted for about 3.5 million of the 148.8 million trays of New Zealand-grown kiwifruit last year, may earn $8.30-$9.30 a tray this year, up from the $8-$9 signalled in April, and against the $9.22 achieved last year.

The sweet Green14 variety, which produced about 900,000 trays last year, may bring in $6.80-$7.80 a tray, Zespri said yesterday. That is down from the $7-$8.50 signalled in April but in line with the $7.23 achieved last year.

(BusinessDesk)

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