NZ: positive results for Seeka, T&G in 2013

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NZ: positive results for Seeka, T&G in 2013

New Zealand's largest kiwifruit grower Seeka Industries (NZX: SEK) has far exceeded expected profits for 2013, while one of the country's leading integrated produce multinationals Turners & Growers (NZX: TUR) was back in the black with a strong result.

In October, Seeka gave a profit guidance of NZ$1.7-2.2 million but in the final result managed to beat the upper forecast limit by 50% at NZ$3.3 million. While this is significantly less than last year's NZ$5.88 million profit, chief financial officer Stuart McKinstry is still upbeat about the figure, stating the company has "successfully absorbed the downturn in fruit volumes and margins caused by [disease] Psa-V".

"Seeka’s strategy to weather the Psa-V outbreak in recent years included selling surplus non-core assets, reducing debt, restructuring operations to reduce costs, and limiting capital expenditure," McKinstry said in an announcement to the NZX.

"Seeka pursued new business areas to improve earnings. The company withheld dividends while it focused on lowering debt. Dividend payments have been reinstated now that net debt levels are well within the Board’s target range."

The executive added that while recovery in kiwifruit - the heart of Seeka's business - provides good growth prospects, developing complementary business in the produce sector could complement that growth potential.

"The past two years have been a difficult time for Seeka and parties associated with it. It remains a difficult time for some, as the industry rebuilds and growers re-graft their orchards with fruit varieties understood to be more tolerant to the Psa disease," he said.

"However, the steps taken by Seeka have strengthened the company and will position it to re-emerge from difficult times on an exciting growth path."

Turners' turnaround

T&G chairman Klaus Lutz

T&G chairman Klaus Lutz

T&G's profit rose to NZ$17.2 million from its 2012 loss of NZ$13.3 million, helped in part by improved pome fruit exports and increased plantings and the maturing of trees from its Global Variety Development Programme, such as Jazz and Envy, in the Northern Hemisphere.

In an announcement to the NZX, T&G chairman Klaus Lutz said overall export trading was the main contributor to the company's profitability, rising from NZ$2.9 million in 2012 to NZ$15.6 million in 2013.

"Delica continued to perform well. The New Zealand operation grew strongly with most products increasing in both volume and margin," Lutz said.

"Delica North America enjoyed continued sales and profit growth in pipfruit, berries and stone fruit categories. The Australian export business improved its result over last year despite a 40% reduction in the available citrus crop.

"Delica Domestic in Australia made a profit in its second year of operation due to volume growth and a successful launch of EnzaGold(TM) kiwifruit in to Australian retailers. Further increase in trading volumes from South American grown grapes and asparagus resulted in an uplift in profit for the Peruvian office."



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