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Satara returns to first-half profit, Psa forces $4.5 mln write-down on assets

Monday 19th September 2011

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Satara Cooperative Group, the kiwifruit grower that abandoned a merger with Eastpack, last year, returned to profit in the first half, though the outbreak of Pseudomonas syringae pv actinidiae forced it to write-down assets by some $4.5 million.

The Te Puke-based company made a profit of $1.1 million, or 6.9 cents per share, in the six months ended June 30, turning around a loss of $279,000, or 1.7 cents a share, a year earlier, it said in a statement. Revenue climbed 9% to $33.8 million on a bigger crop volume and new growers coming on board, it said.

“Satara’s market share has remained steady coming into the 2011 season and is showing signs of growth in an extremely competitive environment,” the company said. “Gains from restructures and key contract negotiations from 2010 have contributed to the strong half-year result prior to the revaluation impairment of land and buildings.”

The Psa bacterium was discovered last year, prompting a $50 million joint initiative between industry and government to manage the canker. The outbreak forced Satara to put the kybosh on a planned merger with Bay of Plenty-based Eastpack.

The company said the impact of the bacteria is still “significantly uncertain” and it will value its assets as part of the Dec. 31 reporting, after which it will be able to assess the impact during the spring season.

The shares last traded on July 6 at 55 cents a share, valuing the company at almost $9 million. The stock has shed 45% this year.


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