NZ: sharp rise in profit for T&G in H1

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NZ: sharp rise in profit for T&G in H1

New Zealand-based produce company Turners & Growers (NZX: TUR) has recorded a 93% year-on-year rise in total comprehensive income for the first half of 2013, buoyed by a strong global apple program and marked increases in stonefruit exports from Australia and the U.S. Jazz apple

An unaudited report showed revenue was up by NZ$31.6 million (US$25 million) while profit for continuing operations was 1.5 times the prior year's figure at NZ$17.755 million (US$14.13 million).

Other expenses and changes to the fair value of hedge flows brought comprehensive income down to NZ$13.735 million (US$19.94 million).

In a statement, chairman Klaus Lutz highlighted a range of successes for the period from T&G subsidiaries such as ENZA and Delica.

"The 2013 New Zealand apple season has had a strong start with increased volumes and favourable market pricing compared to last year. In particular the Group’s flagship varieties, JazzTM and EnvyTM, are forecasted to improve on 2012," said Lutz, who is also the CEO of T&G's German owner BayWa AG.

"ENZA’s global apple programme has delivered increased returns to the Group, particularly from the North American market which has seen price and volume increases on 2012 levels, even after a severe hail storm affected the crop harvest.

"There is continuing demand from apple growers globally to plant ENZA varieties. Exports of stonefruit from Australia and USA through Delica have increased markedly in comparison to 2012 volumes. However poor growing seasons for New Zealand citrus and stonefruit have led to export volumes being less than the prior year."

The announcement highlighted a significant improvement in results for the group's New Zealand's pipfruit orchards.

"The 2013 New Zealand apple growing season was characterised by dry conditions resulting in smaller fruit sizes, however this was offset by strong market returns and increased production volumes from maturing plantings."

Results were not as positive for other growing operations, such as specialist hothouse tomato growing operation Status Produce and fruit grower Kerifresh.

"The long hot summer in New Zealand was ideal for growing tomatoes, resulting in additional volume from competitors, particularly outdoor growers. The increased supply, in conjunction with reduced demand from consumers "home-growing", had a negative effect on market prices," Lutz said.

"The extended drought throughout the summer made for a challenging six months for Kerifresh. The small size profile as a result of the growing conditions has impacted the prices attained for citrus. Despite the same issue affecting the kiwifruit crop, returns have been higher due to a successful export programme to Australia."

Bonita bananas contributed strongly to the group's domestic division, but this was offset by low tomato prices so this part of the business traded at a similar level to last year overall. Operating profit improved for Australian subsidiary Fruitmark, while a one-off gain was recorded in relation to the sale of its share in a Belgian joint venture.



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