Zespri's latest forecast holds profit steady; Gold returns dip

Friday 21st October 2016

Kiwifruit marketer Zespri has reiterated its forecast profit range for the 2017 financial year of between $66 million to $71 million despite an expected decline in returns from gold varieties.

That figure includes licence revenue of $50.2 million after tax from this year’s release of 400 hectares of the new gold variety, Gold3.

The October forecast approved by the board yesterday shows the total fruit and service payment, across all pools and excluding the loyalty premium, is forecast at $1.3 billion. That’s unchanged from the August forecast when Zespri reduced both grower forecast returns and corporate profit for the season due to the impact of increased crop volumes for the still dominant Green variety.

Forecast returns for Green were up one cent at $4.22 per tray which is well under the prior season’s $5.13 per tray and follows record supply, up 30 percent over the past two seasons.

“We are working to drive Green run rates and finish the season in good time, with our marketing programmes now entirely focused on supporting Green sales,” chief executive Lain Jager said. “We are also seeing fruit quality holding really well.”

Compared to the last forecast two months ago, gold returns are down six cents per tray to $8.21, the same as last season’s final return. That was due to changing market mix and the impact of foreign exchange returns, said Jager. “Sales are nearing completion with around a million trays to go as of the end of October,” he said.

Forecast returns for Green14, the sweet variety introduced in 2010, were also up - rising 40 cents to $5.52 per tray against the August figure, though below $7.01 achieved last season, while Organic Green increased by 20 cents per tray to $6.45, compared to the $7.18 achieved last year.

In August Zespri said it was on track to sell 82 million trays of NZ Green and 47 million trays of NZ SunGold this season.

BusinessDesk.co.nz

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