NZ: SunGold and organic kiwifruit volumes surge for Seeka in H1 - FreshFruitPortal.com

NZ: SunGold and organic kiwifruit volumes surge for Seeka in H1

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NZ: SunGold and organic kiwifruit volumes surge for Seeka in H1

New Zealand's largest kiwifruit packer Seeka (NZX: SEK) has notched a 39% year-on-year rise in EBITDA for the first half to NZ$5.8 million (US$4.88 million), despite a more competitive postharvest environment with tight margins. shutterstock_94877275 - panorama

The result comes off 1.4 million extra trays of kiwifruit, of which more than three quarters were of Class 1 grade.

In the Class 1 category, the amount of conventional green Hayward kiwifruit was in fact slightly down, but the drop was more than offset by a 73% jump in organic Hayward volume hitting close to one million trays.

Even more notable was the increase in volumes of SunGold G3 kiwifruit, rising almost fivefold to 1.115 million trays. The variety has been seen as a key Psa-tolerant replacement for the traditional Zespri Gold (Hort16A) kiwifruit cultivar, whose volumes were down a further 15%.

In terms of other varieties, volume was up by around a fifth for SweetGreen G14 and almost doubled for gold variety Charm G9, which has recently shown some postharvest problems at retail.

"Gold market share is expected to rebound when re-grafted SunGold orchards reach commercial volumes in 2015," the company said.

"Detailed planning is underway to ensure Seeka has the capacity and infrastructure to meet processing demand and perform well for Hayward and other variety growers next year.

"The post harvest environment remains competitive. Margins are tight as post harvest companies drop prices to attract custom. While capacity is overall expanding to handle greater volumes of fruit, a competitive environment is expected to continue."

While the increased gains reflect higher volume and better orchard and emerged business earnings, the balance was also affected by gains of NZ$1.4 million (US$1.18 million) from the sale of OPAC and a new grower share scheme expense of NZ$1.9 million (US$1.6 million).

"The company is satisfied with the profit increase for the six months despite challenging trading conditions and rising costs."

Looking ahead, the company plans to continue rationalizing its asset holdings and pay higher dividends, while also exploring opportunities to diversify and innovate.

"For example, Seeka in the past six months initiated collaborative marketing programmes which lifted company revenues as well as increasing the wealth of all kiwifruit growers," the company said.

"Seeka purchased Glassfields, a retail services business in April. Glassfields provides ripening services, operates a small wholesale market and imports bananas, pineapples and papaya from Sumifru for ripening and supply to retail. These activities have been merged with our SeekaFresh business."

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