Turners & Growers posts loss

23:12, Aug 14 2013

Bruised by $29 million in asset writedowns, fruit and vege firm Turners & Growers has posted a full-year loss of $15.3m.

The loss, though deep, was an improvement on the previous year's $18.9m loss - also due to asset writedowns, and better than the $16m to $19m loss it forecast in December.

The NZX-listed company, about three-quarters of which is owned by German firm Baywa, said revenue for the 12 months to December 31 rose 3.7 per cent to $669.1m.

The $29m in asset writedowns followed a lowering of the value of its apple orchards - "reflecting the current pessimistic view of the industry's environment and economic conditions ... including risk of lower yield and the predicted strength of the New Zealand dollar."

The company also wrote down the value of its kiwifruit orchards affected by the kiwifruit disease PSA.

Turners & Growers said trading in its export segment had been robust, with lower volumes but better returns achieved in pipfruit exports. That was due to a higher export quality yield from growers and a shift towards higher value varieties.

However, profit for the export segment fell 61 per cent to $2.9m, primarily due to a bad debt provision and the impairment of kiwifruit plant variety rights held by the group.

In its domestic business Turners said an oversupply of imported produce weighed on prices and earnings, dragging profit down 70 per cent to $1.5m.

Chief executive Geoff Hipkins said in December that tomato and banana prices had been particularly hard hit.

Tomato prices had reached $10 a kilogram due to a supply squeeze out of Australia but slumped to just shy of $3 a kilo as supply returned.

Demand for bananas had been flat but supply swelled as Philippine bananas banned from China were diverted to New Zealand.

Profit in the company's processing division lifted 22 per cent to $3.3m, as it sold more fruit ingredient products.

The strong tomato prices last winter made for a record-breaking year in its Status Produce business, but that was heavily outweighed by the orchard writedowns - leading to a $22.8m loss for Turners growing operations.

The company signalled a positive start to the 2013 year, with chairman Josef Lutz describing early trading as "overall slightly above budget".

The company's shares on the NZX are unchanged at $1.53 today on no trades. They rose 2 per cent yesterday - when the result was announced.