NZ: T&G Global posts H1 profit rise with strong pipfruit performance
T&G Global, one of New Zealand's largest fresh produce companies, registered a 40% increase in operating profit for the first half of 2018 on the back of a strong performance from its pipfruit and international produce businesses.
The group, which is controlled by Germany's BayWa, notched a profit of NZ$10.5 million, while venue over the period rose 14% to NZ$581.7 million.
Its pipfruit business saw operating profit increase by 12% to NZ$13.1 million, with revenue rising 22% to NZ$329.1 million.
The company - whose proprietary apple varieties include Envy and Jazz - said the segment benefited from an earlier harvest in 2018, resulting in fruit moving into the market quicker than in the first six months of 2017.
The division was also able to take advantage of European apple shortages caused by frosts in 2017, it said.
However, these gains were offset by a lack of export quality fruit impacting sales in North America. Combined with lower pricing driven by a smaller fruit size profile, revenue in the North American market decreased year-on-year.
T&G's international produce business unit - which trades produce other than pipfruit around the world - saw operating profit rise by 110% to NZ$2.1 million, with revenue up 12% at NZ$126.7 million.
The company said this improvement was driven mainly by sales of produce exported from South America, particularly grapes, mangoes, and cherries.
"Improvements were also seen in Australian export grapes and asparagus due to better weather conditions than in the prior year. There was also an increase in sales in Pacific Island markets due to stronger relationships being fostered with key retailers," it said.
Meanwhile, the New Zealand produce division saw a 3% rise in revenue to NZ$111.9 million but an operating profit decline of NZ$4.6 million from last year when there were "exceptionally high prices and margins."
"Operating profit has been affected by unusually low prices experienced by the Covered Crop business unit early in 2018 and lower production volumes of high value sweet tomato varieties," it said.
"This combined with the loss of a blueberry harvest because of rains experienced in Kerikeri have been the major drivers of the reduction in operating profit."