NZ: T&G records 2012 loss despite "robust" exports

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NZ: T&G records 2012 loss despite "robust" exports

New Zealand-based produce company Turners & Growers (NZX: TUR) has recorded a net loss of NZ$15.29 million (US$12.65 million) for 2012, but it would have been in the black if it weren't for an NZ$29 million (US$23.99 million) asset write-down.

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T&G chairman Klaus Lutz

The loss however is still a 23% improvement on the 2011 result, marking the first year under the majority ownership of German agribusiness BayWa.

Turners' export profits actually fell by a whopping 61.8% to NZ$2.9 million (US$2.399 million), but this was attributed to a bad debt provision and the impairment of kiwifruit plant variety rights. As far as export sales were concerned, the performance was positive.

"The pipfruit export result improved despite lower volumes, due to the higher export quality yield from growers' submissions and a favourable shift in the variety mix to higher value varieties. ENZA [subsidiary] also achieved further efficiency enhancements and capacity utilisation in its coolstores and packing facilities," said chairman Klaus Lutz in a statement.

"Implementation of foreign exchange hedging for apple exports, reduced supply chain costs, and refined market allocation planning of New Zealand grown apples enabled ENZA to significantly increase grower returns on the major apple varieties led by top returns for Envy(TM).

"Due to the further increasing success of Jazz(TM) in the Northern Hemisphere and increased volume from maturing trees, ENZA's commission income from offshore plantings increased substantially."

The company's Delica business raised its year-on-year contribution by 24%, with growth across the board geographically.

"The New Zealand operation had a positive year with most products increasing in both volume and margin.

"The North American operation experienced substantially increased growth and profits. Delica Australia managed to turnaround their export business and the newly formed import business tracked above expectations.

"Delica's further growth is expected to continue in 2013 due to higher apple exports to Asia, a further improvement in Australia and higher trading volumes from South America."

Elsewhere, Lutz pointed to the opening of a facility in the Fijian city of Nadi, with operations exceeding expectations, through an increased market share in retail, wholesale, resorts and food service sectors.

Local situation

The executive labeled the New Zealand domestic result as "disappointing" with profit falling 70% to NZ$1.5 million (US$1.24 million), driven by an oversupply of imported produce.

A NZ$22.8 million (US$18.86 million) loss was recorded for growing operations, following the revaluing of apple orchards, the writing down of some assets and losses for some crops.

"Apple orchards and biological assets were significantly revalued down at year end reflecting the current pessimistic view of the industry's environment and economic conditions including factors such as risk of lower yield and the predicted strength of the New Zealand dollar.

"In addition Inglis Horticulture had a difficult year due to low yield and the high cost incurred in combating European canker.

"Kerifresh's results were disappointing due to a large asset write down for orchard land and biological assets and an operational loss on the 2012 lemon crop."

On kiwifruit, the company has identified vine disease Psa in one orchard and strict controls are in place to contain the bacteria.

"The 2013 kiwifruit crop is expected to be up on volume and the new collaborative approach between Zespri and Turners & Growers is anticipated to deliver positive results."

Turners' Status Produce registered another consecutive record-breaking year with strong tomato prices in the winter months of 2012.

"Future growth is expected from promising results of research and development work on new tomato varieties."

The company's ENZAFoods processing business witnessed a 22% rise in profit to NZ$3.3 million (US$2.7 million) for the period.

Related story: NZ: Turners & Growers 'changing the way it ships to market'


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