Week ending Sunday 24 May 2020Welcome to this Seeka grower and stakeholder update bringing you up to date as we head to the last week of kiwifruit harvest 2020. It’s been a really remarkable harvest season, and it wasn’t that long ago that there was the real possibility that we wouldn’t be able to get the entire crop off. The withdraw of Eurofins, COVID-19 pandemic, border closure and shortage of labour exacerbated by fewer RSE workers, lockdown and social distancing, and now drought affecting Hayward fruit size, quality and yields. It’s hard to imagine what other challenges could have been thrown at our community striving to get the crop off and through. In the later stages of the harvest some of the regional Hayward orchards without irrigation have had small fruit size, high undersize and high rejects as a result of the drought. While this is a regional issue rather than a Seeka specific issue, the real likelihood is that those growers will operate at a net loss for the year. Our Hayward crop continues to be lower than expectation, and the second year of lower yields really reflecting the long dry summers over the last 2 years. On the more positive fruit continues to load out well and present excellently in the market. At this stage there is nothing remarkable to comment about in the fruit loss and offshore quality results, so that is good. All of our results so far are fine. Last week Seeka announced the sale and lease back of three of its Australian kiwifruit orchards. The potential lease term is long, up to 30 years with review and exit points along the way. This sale for AUD$26.5m is subject to the approval of Australia’s Foreign Investment Review Board as these orchards have been conditionally sold to a foreign party and approval can take up to 6 months. The project to profitably sell and lease back the orchards has taken over 12 months to transact, and the funds released will be used to repay debt and complete the new developments in Australia. Seeka has completed both its kiwiberry program for the current year, harvest ended March 2020, and the avocado selling season 2019/2020. Both have performed excellently. In the case of kiwiberry the returns have been a record. The program has returned our top growers more than $330k per hectare with many over $200k. It’s a nice turn around for a variety that has struggled after it lost China access. Seeka along with Freshmax have to optimise the market opportunity. In the case of avocados, the average return is $18.79 per 5.5kg tray. While not a record it’s a very good return to growers from a challenging season. In both cases the integrated growing, packing, distribution and marketing with a strict focus on quality and branding has delivered what we understand to be the highest returns in the Industry. And finally, Seeka has now benefited from over 260 RSE workers who have transferred to our regions to provide the labour for the winter pruning program. These people are being trained and will be available to ensure that we have sufficient labour to undertake the task ahead. To the numbers:
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