A bumper kiwifruit harvest propelled EastPack to a record financial performance over 2018.
New Zealand’s largest grower-owned kiwifruit and avocado post-harvest operator posted a net profit of NZ$9.8m for the year ending 31 December 2018, a NZ$4.96m increase from its 2017 result.
Revenue grew to NZ$185m in 2018, up from NZ$150m in 2017, with the strong profits flowing back to growers. A total of NZ$7.9m was paid out to transactor shareholders during the year, with investor shareholders also receiving a fully imputed dividend of NZ$0.9 per share, up from NZ$0.5 per share in 2017.
The performance came on the back of a record kiwifruit crop, which saw 41.1m trays packed across EastPack’s six sites in the Bay of Plenty region. EastPack chief executive, Hamish Simson, said the co-operative’s growers generally observed high Class 1 pack-outs and strong storage performance in a year with later loadouts than 2017.
“We also saw increased demand for Prospa, our orchard management service,” Simson explained. “The majority of Prospa’s new clients get their orchard managed to ensure a consistent labour supply, and to deal with the increasing complexities of producing kiwifruit. The Prospa team now covers over 900ha across all growing areas, a 10 per cent increase since 2017.”
Simson said EastPack’s competitive strength is having sufficient packing and storage capacity when growers want their fruit harvested. The co-operative will improve this capability through the construction of a fully automated coolstore in Te Puke, with the capacity to store a further 1.2m trays.
“Over the past three years we’ve channelled significant investment towards packing, pre-cool, and coolstore capacity to keep ahead of rapidly increasing fruit volumes, particularly gold (SunGold),” Simson added.
EastPack chairman, John Loughlin, said the results point to a bright future ahead.
“With the impending industry growth, EastPack has signalled the need to invest further in infrastructure alongside innovation. We’ve begun consultation with shareholders on raising more capital to ensure continued high performance and resilience, and any implications this may have for our capital structure,” said Loughlin.
“We will continue to invest in technology and infrastructure to support growth and service for EastPack shareholders. We’re committed to the continued success of our growers and the latest financial results are testament to that and the dedication and hard work of all of those within the industry.”
