Kiwifruit supplier says structure continues to prioritise returns to growers, with forecast net profit higher than previously expected
Kiwifruit marketer Zespri has commented on recent reports published by both Fruitnet and New Business Review regarding its recent profit forecast.
In a story published on 5 December, it was reported that the company’s net profit could fall by as much as 21 per cent in 2024/25.
A spokesperson for Zespri responded: “[Our] structure is in place to prioritise grower returns. The margin mechanisms that we apply from the sale of New Zealand kiwifruit is agreed within our industry, and this results in us returning significant value to growers via fruit returns and loyalty payments.”
In New Zealand, the spokesperson said, the group targets a 1 per cent margin for earnings before interest and tax from “cooperative-like” activities linked its the single-desk structure – compared with a more typical corporate EBIT margin of 3-5 per cent.
“Should Zespri’s EBIT be over 1 per cent for New Zealand kiwifruit in any year, then in accordance with industry agreements, half of all profits greater than 1 per cent are shared directly from Zespri to New Zealand growers as additional loyalty payments,” it continued.
Zespri’s other significant corporate revenue streams, which are not subject to those cooperative-style sharing arrangements, include licence and royalty revenues from Plant Variety Rights, and sales commission from kiwifruit sales sourced from Northern Hemisphere production – often referred to as Zespri Global Supply.
“In November, we updated the industry that our group-wide corporate net profit after tax for 2024/25 is expected to be between NZ$137mn and NZ$147mn, including licence income,” the spokesperson added. “This is a lift from August when it was expected to be between NZ$132mn and NZ$142mn, including licence release income.”
The change from 2023/24 to 2024/25 reflects a reduction in licence revenue, after Zespri sold 250ha of SunGold licence in 2024 vs 350ha in the previous year. This was partly offset by improved earnings from its New Zealand kiwifruit segment.
“Our focus continues to be on maximising the value we can return to growers this season, with orchard gate returns up across almost all categories in our November forecast. We also remain focused on operating efficiently and managing costs to deliver value for our shareholders.”
