Terra Vitae, Craggy Range post stronger full-year profits on rising wine prices, bountiful harvest

Monday 19th December 2016

New Zealand’s Terra Vitae Vineyards and Craggy Range Vineyards both reported a rise in full-year profit on the back of a solid harvest and improving prices as wine remains one of the Pacific Nation’s fastest growing exports.

Terra Vitae Vineyards reported total gross income from grape sales at $8.9 million in the year to June 30, up from $7.1 million in 2015. After expenses, its operating profit of $3.4 million was more than twice the $1.4 million reported in the prior year. The company, which trades on the Unlisted Market, declared a dividend of 1.5 cents per share, which was paid on Dec. 15, 2016, with a record date of Nov. 30, 2016. The shares were last quoted at $0.48.

Craggy Range, owned by the Peabody family, reported an operating profit of $2 million in the year to June, up from $916,444 in the prior period as group revenues rose. Profit for the year was $690,550 versus $222,975 in the year to June 2015. The company produces wine from Hawkes Bay and Martinborough in the North Island and Marlborough at the top of the South Island.

New Zealand’s wine exports reached $1.6 billion in the year to October, up 7.1 percent from the prior 12-month period. In 1960, wine exports were $51 million. The industry, which aims to hit $2 billion of exports by 2020, has been bolstered by strong demand, supply constraints after a smaller 2015 vintage and a weaker New Zealand dollar against the U.S. dollar.

Terra Vitae Vineyards said its total production was 4,693 tonnes compared with 3,882 tonnes in the prior year and was 18 percent higher than its budget forecast. Crop value increased in four of its five vineyards. Only Twyford Gravels, in Hawke's Bay, yielded below budget, which the company said was a direct result of untimely Easter rain.

Terra Vitae Vineyards, with vineyards in Hawke's Bay and Marlborough, joined forces with Seddon Vineyards of Marlborough Ltd a decade ago and has a long-term supply arrangement with Villa Maria Estate, one of New Zealand’s largest locally owned wine companies. The deal gives it a guaranteed purchaser for its grapes at market prices. Board members include Milan Brajkovich, Vineyard Director at Kumeu River Wines.

Looking ahead, chairman Joe Ferraby said the company’s bid to concentrate on sustainable yields of good quality grapes and the long term health of the vines was paying off but sounded a note of caution. "Various factors out of our control will have an impact on each vintage. Temperatures throughout the growing season, rainfall, disease pressure and the timing of pruning can all impact heavily on the operating profit," he said.

BusinessDesk.co.nz

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