Zespri enjoyed "remarkable" kiwifruit season in 2016-17
New Zealand kiwifruit marketer Zespri said a "remarkable" 2016-17 season, as increased yields helped lift total sales volume by a fifth year-on-year to 137.7 million trays.
Sales from its Northern Hemisphere supplying locations also grew by 14% to 16.6 million trays, driven mainly by SunGold vines coming into production in Italy.
Chairman Peter McBride said the entity sold more fruit faster than ever before during the season, with global fruit sales revenue also rising by a fifth to NZ$2.26 billion.
“Volume growth and continued strong investment by Zespri into marketing and market development helped to lift returns overall with the average return per hectare for New Zealand growers reaching (NZ)$68,868 (US$48,370)," he said.
The 2016-17 season also saw the announcement of 1,800 hectares of SunGold licence allocated for Europe over the next three years, doubling Zespri’s offshore production of the variety.
Zespri’s net profit after tax more than doubled from NZ$35.8 million to NZ$73.7 million, mainly due to revenue from the tender for license for Zespri’s proprietary variety SunGold last year.
“There was strong industry participation in the release of 400 hectares of SunGold licence in New Zealand last year, reflecting the continued grower confidence in global demand for gold kiwifruit,” McBride said.
Revenue from the New Zealand SunGold licence release is a "significant driver" of Zespri’s corporate income, it said.
A further 400-hectare tranche was released through a tender to New Zealand growers this year and the board will decide on a potential three additional tranches of 400 hectares each year up to 2020, subject to an annual review of performance after each selling season.
Zespri’s distributable profit range for the 2017-18 financial year is expected to be NZ$101 million to NZ$106 million, based on the forecast net profit after tax range announced in April.
Green yields support returns
McBride noted the season was challenging in several respects, despite the positive end result.
“A sharp increase in Green volume and a late start to the season due to delayed maturity put pressure on pricing but record average yields of 12,281 trays per hectare meant the industry could achieve per-hectare returns of $53,555," he said.
"This is the third season in a row that Zespri has delivered average Green returns of over $50,000 a hectare.”
The Green return per tray was NZ$4.36, down from NZ$5.13 per tray in 2015-16.
McBride also explained SunGold delivered an "outstanding result."
“Zespri achieved an average per-tray return for the Gold pool of $8.64 – up from $8.21 in 2015 – despite supply increasing to 48.5 million trays from 32.6 million trays in 2015/16. Average per-hectare returns increased by 39 percent to $98,838," he said.
"The customer and consumer response to SunGold continues to be very positive, supporting our confidence in market demand.”
The average per-hectare return of NZ$54,427 (2015/16: NZ$52,917) for Organic Green is a record result for the category, supported by strong yields, although the return on a per tray basis fell to NZ$6.86 per tray (2015/16: NZ$7.18).
The return per tray for Green14 (Sweet Green) was NZ$5.79 (2015/16: NZ$7.01) but the average per-hectare return increased to NZ$45,853, driven by higher average yields as orchards came into full production.
“We can be satisfied overall with performance in the season, with a good result delivered despite the challenges of a sharp increase in supply and a relatively late harvest,” McBride added.
“The task ahead is to continue to deliver long-term value for growers and shareholders through consistent and disciplined implementation of our strategy.”
2017-18 season outlook
Zespri Chief Executive Lain Jager noted the volume outlook for 2017-18 was down on last season but still the second-largest crop in the company’s history.
“Supplied SunGold volumes will increase to around 55 million trays but seasonal factors will see Green volumes fall back to around 69 million trays supplied, versus 83 million trays sold last year," he said.
"Our sales and marketing teams are launching programmes in 59 countries and working hard to maximise value to growers and shareholders through great campaigns and promotions in support of our premium kiwifruit."