T&G Global forecasts sharp profit drop due to Covid-19 disruptions
New Zealand-based T&G Global warned its profit this year may fall by as much as 76 per cent as the Covid-19 pandemic disrupts its operations.
The company expects profit of between NZ$4 million (US$2.8) and NZ$10 million (US$7.1) this year, down from NZ$16.6 million (US$11.7) last year, chief executive Gareth Edgecombe said in a statement to the NZX. That follows a 64 per cent drop in first half profit to NZ$3.4 million (US$2.8 million).
Edgecombe said the outlook was “disappointing” and reflected updated forecasts across its business units.
The company’s apples business had faced shipping challenges, which impacted pricing and costs, especially in the Northern Hemisphere and Asia, he said.
Its international trading business had been hurt by shipping delays, market access challenges, and supply shortages, particularly from the United States and Australia, he said.
Meanwhile, its fresh business had been impacted by the shortage and cost of labour, the pricing of seasonal produce lines, restrictions on physical openings of independent retailers and foodservice businesses, and shipping delays for imported produce, he said.
This year’s profit will also include property disposals and plant write-downs, although the impact on profit is expected to be “largely neutral”, he said.
“T&G continues to adapt to the challenges of the current operating environment, and the board is confident that the resulting operational efficiencies will, along with the growing revenue streams from its genetics business, result in significant improvements in performance over the next year,” Edgecombe said.