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Welcome to our week 34 update. Our teams have been through a heavy loadout week last week and as a result we are down to very low levels of fruit in store, our fruit loss is low and our fruit quality in the market is excellent.
Seeka announced its unaudited results for the six months ended 30 June 2017. Seeka had previously advised the market that it expected operational earnings after tax for the full year to be lower than 2016 by up to 15% as a result of a significantly lower Hayward volume. Ironically our six months results for 2017 are significantly higher than 2016 reflecting an earlier load out season, good earnings in our avocado business [growing, post-harvest and selling] and a much stronger result from Australia primarily the result of a much better kiwifruit volume.
Profit after tax for the six months tax totalled $11.09m compared against $7.12m in the same period in 2016. This included earnings after tax from the Australian business of $3.00m compared to $1.23m in the same period last year. Seeka is forecasting lower earnings in the back six months in New Zealand. Simply we are holding much lower volumes of kiwifruit in store and this affects our second half earnings.
Our orchard teams are satisfied with the canopies they are working with on the orchards and our post-harvest infrastructure is largely set for the harvest volumes anticipated in 2018.
Seeka has announced a dividend of $0.10 per share [fully imputed] to be paid on 22 September to all shareholders on the register on 15 September.
To the numbers: [to midnight Sunday 27 August]
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INVENTORY PERFORMANCE AS AT 31/7
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HAYWARD CONVENTIONAL
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HAYWARD ORGANIC
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SWEETGREEN G14
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SUNGOLD G3
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SUNGOLD ORGANIC
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TOTAL
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Packed |
14,799,410 |
687,406 |
90,038 |
8,542,692 |
115,585 |
24,235,131 |
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Shipped |
11,668,743 |
629,838 |
89,778 |
8,340,774 |
110,967 |
20,860,100 |
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Instore |
3,079,496 |
56,774 |
- |
142,664 |
1,129 |
3,280,063 |
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On Order |
1,001,806 |
22,251 |
|
155,585 |
256 |
1,179,898 |
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Lost - TE |
31,171 |
794 |
260 |
59,254 |
3,489 |
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Lost % |
0.21% |
0.12% |
0.29% |
0.69% |
3.02% |
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Industry Lost % |
0.25% |
0.28% |
0.23% |
0.67% |
1.98% |
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Estimate time $ |
$1,624,180 |
$92,151 |
-$3,905 |
$1,344,060 |
$18,435 |
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per tray |
$ 0.110 |
$ 0.134 |
-$0.043 |
$0.157 |
$0.157 |
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Our SunGold volumes are down to 143k trays and will be substantially loaded this week. The final fruit loss predicted to be well under 1%. A fantastic result given the harvest, challenges of clearance by size and the softer fruit experienced in some lines at packing.
Hayward conventional and organic both continue to perform excellently. Fruit loss in both very low volumes in store are much lower than previous years signalling an early shipping season.
Zespri has provided its forecast orchard gate returns for the current year. These are outlined in the tables below:
Movement between 2016 Final Forecast and 2017 Forecast #1
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FRUIT SERVICE PAYMENTS PER TE
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2017
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2016 |
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Description |
August |
May |
Movement |
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Green Conventional |
$ 9.442 |
$ 7.802 |
$ 1.639 |
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Green Organic |
$ 10.960 |
$ 9.819 |
$ 1.141 |
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Sweet Green |
$ 8.631 |
$ 9.505 |
$ (0.874) |
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SunGold |
$ 13.488 |
$ 12.672 |
$ 0.816 |
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OGR PER TRAY
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2017
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2016 |
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Description |
August |
May |
Movement |
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Green Conventional |
$ 5.837 |
$ 4.362 |
$ 1.475 |
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Green Organic |
$ 7.922 |
$ 6.861 |
$ 1.060 |
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Sweet Green |
$ 5.254 |
$ 5.790 |
$ (0.536 |
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SunGold |
$ 9.289 |
$ 8.682 |
$ 0.607 |
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OGR PER HECTARE
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2017
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2016 |
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Description |
August |
May |
Movement |
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Green Conventional |
$ 52,038 |
$ 53,555 |
$ (1,517 |
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Green Organic |
$ 48,058 |
$ 54,427 |
$ (8,369) |
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Sweet Green |
$ 36,408 |
$ 45,853 |
$ (9,445) |
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SunGold |
$ 105,140 |
$ 99,547 |
$ 5,593 |
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INDUSTRY YIELD
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2017
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2016 |
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Description |
August |
May |
Movement |
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Green Conventional |
8,915 |
12,281 |
-3,366 |
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Green Organic |
5,815 |
7,933 |
-2,119 |
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Sweet Green |
6,930 |
7,921 |
-991 |
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SunGold |
11,319 |
11,466 |
-147 |
Generally we are happy with the improvement in the returns per tray for Hayward conventional but not about the return per hectare. Recently highlighted by growers is the question about how the inventory has been optimised to the highest returning markets only to deliver the same return per hectare as last year. Hayward organic growers are wondering how a market price improvement of more than conventional has delivered a lower increment than conventional. No doubt this will be corrected in subsequent forecasts.
Seeka is now preparing individual forecasts and will get these to you just as soon as we are confident in the numbers.
Regards,
Michael
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