New Zealand kiwifruit giant Zespri has revealed that its 2015/16 kiwifruit season broke numerous records, with the biggest-ever total return to growers, highest-ever Green return per hectare and record sales volumes for both Zespri Green and Zespri SunGold Kiwifruit.
Zespri Chairman Peter McBride explained that total sales revenue for the season also grew to hit NZ$1.9bn, up 21 per cent from the previous season.
Total fruit and service payment to growers for New Zealand-grown fruit increased 22 per cent on the previous year to NZ$1.143bn, with average return per hectare reaching a record NZ$60,758.
“Zespri sold 131.6m trays in the 2015/16 season, up 21 per cent on the previous season,' said McBride. 'New Zealand-grown kiwifruit sales hit 117m trays – nearly 22m trays more than the previous year – and 14.5m trays of non-New Zealand kiwifruit.'
McBride said that the record per hectare Green return of NZ$56,673 – up from NZ$53,884 last year – was driven by a reduced per-tray return of NZ$5.13 (down from NZ$6.01 last year) but very strong average orchard yields of 11,048 trays per hectare, up from 8,972 trays per hectare last year.
“Across the industry, New Zealand kiwifruit growers have responded year-on-year to the challenge of growing in a Psa environment by improving orchard management practices,' he continued. 'Combined with favourable weather conditions last season, the result was a very large crop of Green of 80.7m. This increase in productivity is positive as it allows us to deliver very good value to both our customers and our growers.'
SunGold’s performance in the markets were described as 'very positive'. The largest-ever New Zealand volume of 27.5m trays, from total New Zealand gold volume of 32.6m trays, was 'sold in excellent time with positive customer and consumer feedback' and earned an average return for the gold pool of NZ$8.21 per tray.
“With SunGold orchard yields progressively coming on-stream after the impact of Psa, the average SunGold yields was 8,653 trays per hectare so we are optimistic that we will see stronger per-hectare returns over the next few years,' said McBride. “The result gives us confidence in market demand for SunGold and supports our decision to release 400ha of additional licence this year.'
Zespri continues to invest in its Northern Hemisphere production, to grow SunGold supply to match the growth in NZ volumes. Volumes of 2.3m trays of SunGold were sold from a total gold ZGS volume of 3.7m trays sold in the season, with forecast total gold sales of around 7.5m trays expected next season.
The Organic Green result was NZ$7.18 per tray on average (NZ$7.37 in 2014/15). The return per hectare was NZ$52,917 – a new record for Organic Green – driven again by higher average yields of 7,373 trays (versus 5,973 trays last year). The Green14 average return was NZ$7.01 per tray and NZ$42,995 per hectare and Zespri continues to work on the positioning of this early season variety.
Zespri’s result for corporate net profit after tax was also strong, increasing by NZ$1.2m to NZ$35.8m. The Zespri Board announced an intention to declare a final full-year dividend of 24 cents per share. The 2016 final dividend will have no imputation credits attached.
This season’s profit and the increase in dividend is partly attributable to the release of a NZ$13m provision entered for matters relating to Zespri’s subsidiary in China, ZMCC, which have now been resolved with the Shanghai Court, as well as receipt of licence fee income during the year. Removing the effect of this exceptional factor, the company's normalised profit after tax is NZ$27.8m (compared to normalised profit of NZ$21.5m last year).
Looking forward, growers and shareholders should be aware that the growth of the Zespri Global Supply business combined with potential future licence revenue may materially positively impact company profitability.
Zespri CEO Lain Jager reflected on a satisfactory result for 2015/16: “Success is about consistent and disciplined implementation of our strategy through successive seasons. While this is a pleasing result, every single piece of fruit we sell is a moment of truth for our brand promise and we still have work to do to improve the consistency of our offering.
“Looking forward, our challenge is to maintain our relentless focus on quality and service to our customers, build demand ahead of supply through this period of strong supply growth and grow market share while maintaining our premium price positioning,” he added.
