Zespri annual profit rises 38%, lifts grower payment

Zespri Group reported a 38 percent lift in full-year profit and tripled its dividend after revenue growth was driven by the release of 400 hectares of licences for the profitable SunGold variety in 2017.

Net profit for the season ended March 31 was $101.8 million with global kiwifruit sales for the year up 6 percent at $2.39 billion, the Tauranga-based business said in a statement. Total revenue, which includes the license income, was $2.51 billion.

Zespri said the total dividend returned to shareholders was 76 cents per share, versus 25 cents per share in the previous season. The payout included an additional interim dividend of 50 cents per share to distribute the majority of funds generated through the 2017 SunGold licence round.

Its total fruit and service payment to growers lifted 6 percent to $1.47 billion, although volumes of New Zealand kiwifruit sold fell by 11 percent.

“We sold a record volume of SunGold while growing returns at both per-tray and per-hectare levels. Supply of Green and Organic Green reduced considerably from the exceptionally high volume of the previous year, but very strong consumer demand more than offset the impact on per-hectare returns for Green and mitigated the impact on Organic Green per-hectare returns," said Zespri chairman Peter McBride.

McBride said the average per-tray for Green was $6.71 versus $4.36 in the prior year "supported by good quality and low rates of onshore fruit loss." Across the industry, the average per-hectare return was $59.981, a new record. Average yields, however, fell 27 percent.

Sales volume for the total Gold category rose by 9 percent to 52.1 million trays and the average return per hectare across the industry was up 16 percent at $114,345. The average return per tray was $10.06 versus $8.64 in the prior season.

The Organic Green return per tray was $8.93 versus $6.86 a year earlier, reflecting increased demand in Europe and other major markets and an improved market mix. Return per hectare, however, fell 4 percent to $52,375 on a 26 percent decline in average yields.

Chief executive Dan Mathieson said Zespri is looking forward to growth in volume. "We are anticipating record production of New Zealand and non-New Zealand kiwifruit this year driven by increasing supply of SunGold and a recovery in supply of Green," he said.