Seeka profit beats forecast

ANDREA FOX
Last updated 11:26 21/02/2013

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New Zealand's biggest post-harvest kiwifruit operator Seeka says it has emerged stronger from the Psa-V disease crisis, declaring a profit well ahead of September market guidance for the year ended December.

Profit before tax, impairment, revaluations and restructuring was $8.9 million (guidance range $5.7m to $6.4m) with cashflow from operations of $12.6m (guidance range $9.8m to $10.5m).

Total bank debt totalled $17.8m (guidance range $20.8m to $21.5m).

The listed company achieved earnings of 41c per share for the year and a net tangible asset backing of $3.89 per share.

After implementing its strategy to counter the impact of Psa on the industry, the company said it was now in a stronger financial position, with significantly lower debt and leaner operating cost structures.

It said it was now well positioned in an environment marked by continuing Psa, intense competition, decreasing gold fruit volumes, and an uncertain industry pathway to recovery.

Psa actions included selling surplus assets, reducing debt, restructuring operations to lower costs, and limiting capital expenditure. The company has withheld the payment of dividends through the period in order to concentrate on lowering debt.

Directors declared a fully imputed dividend of 6 cents per share, to be paid on on March 20. The dividend will be paid to shareholders on the register at 5pm March 13.

Operating revenue totalled $108.3m, down 22 per cent on the previous year.

The company said this reflected lower post-harvest and orcharding volumes, primarily caused by the removal of Psa-affected Zespri gold fruit vines. The volume of gold fruit processed fell to 3.3 m trays from 6.4m trays the previous year. The volume of gold fruit yielded from long-term lease orchards declined to 670,000 trays compared to 1.5 million trays the year before.

Seeka said the outlook was for a further significant reduction in Zespri gold fruit, with no gold trays from long-term lease orchards due to the removal of the productive vines.

Earnings before interest, tax, depreciation and amortisation was $15.5m up on $11.3m the previous year, which included a $9.7m impairment of long-term lease biological assets ($300,000 in the current year). The current year also includes $0.6m in restructuring costs.

Positive earnings before tax of $7.4m compares to a $7.3m loss in the previous year.

Cashflow from operations totalled $12.6m, compared to $18.3m.

Debt was significantly lowered, with total bank debt at year end of $23.m, which included $2.4m current debt.

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The company said it also held $5.2m in cash deposits, which lowered net bank debt to $17.8m, down by $12m or 40 per cent on the previous year.

By end December, Seeka said it had invested an amount of $8.7m in next season's crop. Core debt net of this seasonal finance is $9.1m, funding $62.7m of property, plant and equipment.

- BusinessDay.co.nz

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