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Zespri annual profit jumps 77% on higher kiwifruit sales, increased licensing

Thursday 23rd May 2019

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Zespri Group says annual profit rose 77 percent as the fruit export marketer benefited from growing global sales of kiwifruit and bigger fees from the licensing of the SunGold variety. 

The firm, which markets kiwifruit on behalf of 2,500 New Zealand growers and another 1,200 in Italy, Japan, Korea and France, said net profit rose to $179.8 million in the 12 months ended March 31, from $101.8 million a year earlier. That's at the upper end of its February forecast for profit of $177-180 million. 

Revenue climbed 26 percent to a record $3.14 billion, of which net global kiwifruit sales were up 23 percent at $2.94 billion. Zespri sold 167.2 million trays of kiwifruit, up from 138.6 million a year earlier. 

Including loyalty payments, Zespri paid out $1.82 billion to Kiwi growers in the year, up 24 percent. Last month, Zespri said it expected to pay $1.77 billion to growers excluding loyalty payments.

The board intends to declare a final dividend of 17 cents per share, taking the annual return to 92 cents. That will be up from 50 cents after adjusting for share issue/buybacks and share split transactions. 

SunGold gave the biggest returns at the orchard gate, up 28 percent at $145,991 per hectare. Organic green kiwifruit returns climbed 40 percent to $73,350/ha, while green kiwifruit returns increased 6 percent to $63,622/ha. Average sweet green orchard gate returns rose 14 percent to $44,549/ha. 

"The sustained growth of the industry is really encouraging and the increase in average returns is helping growers meet increasing operational costs including labour," chair Bruce Cameron said in a statement. 

The company will release more details when it publishes its annual report in June. 

Chief executive Dan Mathieson said Zespri is focused on growing new markets and getting deeper penetration in existing ones. 

"We’re continuing to see strong growth in our largest markets, including Japan, China and Spain, and making real progress in newer ones like the US." 

The fruit exporter derived gross revenue of $192.6 million from the SunGold licence release in the 2019 financial year, releasing 700ha of conventional SunGold and 50ha of organic SunGold to local growers. It also pocketed $28.4 million from its share of the 3 percent royalties charged to licensed growers.

Zespri's shares are listed on the Unlisted platform. They traded at $7.50 earlier today, up from $7.20 when the last traded on May 17. 

(BusinessDesk)

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