Leading Australasian fruit company Seeka endured mixed fortunes in 2017, with a reduced kiwifruit harvest in New Zealand partly offset by the improved performance of its Australian business division.
In an announcement issued to shareholders last week, Seeka revealed a profit after tax of NZ$5.833m for 2017, down 44 per cent on the NZ$10.385m it recorded in 2016.
The volume of kiwifruit harvested and processed by Seeka for the 2017 season declined by 21 per cent compared to 2016, a result of 'seasonal' factors according to the announcement. Within this total, the Hayward (green) component of the crop reduced by 33 per cent.
'The scale of this reduction and its potential to significantly impact the company's operational earnings was identified early,' the announcement explained. 'Seeka updated shareholders and took steps to minimise costs and maximise earnings.
'The steps taken by Seeka led to a better profit from operations than forecast given the scale of the reduction in New Zealand kiwifruit volume.'
The overall performance was also influenced by a change to the banana sourcing arrangements of a key retail customer, which led to Seeka's retail services business losing a supply contract.
'Annually the carrying values of all assets are reviewed for impairment, the loss of this supply contract resulted in an impairment of NZ$2.031m in the carrying value of goodwill,' the shareholder report added.
Meanwhile, Seeka handled a record 487,095 avocado export trays over the 2016/17 season, up from 225,656 export trays in 2015/16, delivering NZ$24.85 per tray to growers. The forecast for 2017/18 avocado returns are expected to be in excess of NZ$40 per export tray.
Earnings from Seeka Australia before interest, tax and depreciation (EBITDA) came in at NZ$2.251m for 2017, up 119 per cent from 2016. With improvement programmes underway in Australia, earnings are expected to progressively improve further.
Seeka is also expecting Hayward kiwifruit yields to bounce back this year, along with a steady increase in Zespri SunGold volumes, while the anticipated increase in New Zealand avocado earnings and continued development of the Delicious Nutritious Food Company further adding to its positive earnings outlook.
'Seeka is anticipating an improvement to earnings at an EBITDA level of between 5 per cent and 10 per cent,' the announcement said.
