New Zealand agribusiness Turners & Growers will write down the value of its orchards after kiwifruit disease Psa-V caused a net loss to the company of NZ$17-19m (US$14-15m) in the 2011 financial year to 31 December.
According to a media release from the company, the revaluation could strip as much as NZ$20-30m from the value of its orchard land and other biological assests.
All valuations, including those for orchard land and other biological assets, have been completed for the 2011 financial year, the media release stated. The net cost of the write downs, which are subject to audit review, was approximately NZ$21m, offset by an accounting net gain of approximately NZ$6m to the balance sheet. A net loss of approximately NZ$27m would be recorded in the company’s consolidated income statement, for the financial year ended 31 December 2011.
The recent outbreak of the kiwifruit Psa-V disease, poor grower returns and global economic uncertainty have all added to the depreciation of orchard land, according to the media release.
T&G chairman Rob Campbell said in a report by the National Business Review the company traded profitably in 2011, but profits would be erased by the orchard value write down and costs associated with the takeover offer by German agribusiness Baywa, which is seeking a controlling stake in T&G.
According to the National Business Review report, Baywa offered to buy 67.1 per cent of T&G at NZ$1.85 a share. The offer will stand until 8 February and is subject to Overseas Investment Office approval.
“It should be noted that the underlying asset base has not changed and the writedowns do not impact the cash position of the T&G Group,” Campbell added.
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