FLLYR: SAT: Kiwifruit Co-operative Satara Announces Steady Result

10 Mar 2010 10:23 am

SAT 10/03/2010 FLLYR

REL: 1023 HRS Satara Co-operative Group (NS)

FLLYR: SAT: Kiwifruit Co-operative Satara Announces Steady Result

Media Release For immediate release March 10, 2010

Kiwifruit Co-operative Satara Announces Steady Result

Strong cost control and disciplined operational activity has underpinned a satisfactory result for NZAX-listed Satara.

The kiwifruit co-operative declared a rebate of 20 cents per Transactor Class I tray (up 75% on the prior year) as well as a fully imputed dividend of 2.0 cents per Investor share. Both the rebate and dividend are to be paid on April 1, 2010.

Chief Executive Officer Wes Anderson-Smith says the distributions balance the company's desire to provide a return to shareholders as well as ensuring funds are retained for reinvestment.

Although the number of kiwifruit trays packed declined slightly in 2009, EBIT before one-offs at $4.7m was a strong result on the lower tray volume.

Avocado volumes meanwhile doubled and Satara significantly increased overall market share in that industry.

Satara ended 2009 with $4.0m less debt and a resulting stronger balance sheet. This debt reduction was driven by a strong focus on both cost control and working capital management.

Debt reduction was also supported by the $1.1m sale of the Company's Wedgewood Street property in Katikati.

The stronger balance sheet ensures that the Company has the financial flexibility to invest in its services and modernise its infrastructure.

Wes Anderson-Smith says that a number of automation and efficiency changes have occurred across the company for the 2010 season.

"This new automation coupled with the existing autopacker technology will underpin productivity gains in the business."

At 1.47%, the Gold fruit loss for 2009 was exceptionally low and superior to any other post-harvest operator in the Bay of Plenty. As a consequence Satara's Gold growers had an Orchard Gate Return (OGR) well above the 2009 industry average.

Hail damage impacted the Green fruit loss but, regardless of this, Satara achieved a huge 50% improvement on the previous year.

Wes Anderson-Smith says the number one priority remains to maximise returns for each and every grower.

"Fruit loss is a key metric for the Company to manage, but it is not the only one. Satara's focus is to ensure all value-add aspects of a grower's return are maximised to drive the OGR per hectare."

He says Satara has been managed well during the last year.

"We have taken a responsible course. We have found ways to slim the organisation down, while continuing to do all we can to drive grower returns. We are ensuring the company is as fit and healthy as it can be to drive value into the future."

He says while always looking for efficiencies, Satara has maintained its focus on long term strategic goals.

"Competition has been strong and there will be challenges coming as the industry adopts new cultivars. The possible cut over to new cultivars in late 2010 will see total industry volumes flatten or dip in the short term."

"Satara is readying itself for these challenges and, through our strengthened balance sheet, focus on efficiency, and strategic initiatives, we are in a good position for the years ahead."

END

For further information contact: Wes Anderson-Smith 027 242 3616

For media assistance contact: Darrell Carlin 021 709 907 End CA:00192306 For:SAT Type:FLLYR Time:2010-03-10:10:23:10

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