Seeka 1st-half profit edges lower after Vital Foods write-down; outlook brighter

Thursday 26th November 2009

Seeka Kiwifruit Industries, the company which handles 26% of New Zealand’s kiwifruit crop, posted a 2.9% decline in first-half profit after it was forced to write off its investment in research company Vital Foods this year.

Net profit fell to $8.2 million, or 0.65 cents per share, in the six months ended Sept. 30, from $8.4 million, or 0.67 cents, a year earlier, the company said in a statement. Seeka declined to participate in Vital Foods’ capital raising and wrote off its $1.75 million investment. Revenue edged higher to $95.5 million from $95.4 million in the first half of the previous year.

Seeka lifted its forecast for full-year pretax earnings to be between $6.9 million and $7.5 million, compared to earnings of $5.6 million last year, after it entered an agreement to buy fruit packaging company Te Awanui Huka Pak Ltd. for $24.2 million to boost its capacity.

“Huka Pak’s crop tends to be early, beyond its own capacity to handle, and at a time when Seeka’s infrastructure is idle waiting for fruit,” chairman Kim Ellis said in a statement. “The acquisition delivers Seeka greater infrastructure utilisation and Huka Pak growers better opportunity to earn the significant early start premiums.”

Seeka’s packing volumes declined 1.6 million trays to 19.3 million trays, and Ellis said the company’s performance had been hindered by a severe hail storm that reduced fruit volumes over the period.

The shares were unchanged at $3 on the NZX today and have surged 38% in the past six months.

Businesswire.co.nz

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