T&G Global trims half-year losses
Food and vegetable grower and marketer T&G Global has trimmed its half-year losses compared to last year, as it makes progress delivering its strategy and continues to recover from the impact of Cyclone Gabrielle.
The listed company, owned by German conglomerate Baywa, recorded an after-tax loss of $0.9 million for 2022, compared to the prior year's $13.6 million profit.
While total revenue for the year at $1.3 billion was $70 million down on the previous year, operating profit increased $3.5m, due primarily to improved performance of the high margin VentureFruit business and reduced operating losses in the international trading business.
But at a group level, a strong start in the first half of the year was partly eroded by product disposals and softer prices linked to the Envy apple brand quality issue. Rapidly worsening economic conditions in the Northern Hemisphere, which affected customer demand in the UK and Europe, also influenced the year-end result.
T&G Global chief executive officer, Gareth Edgecombe, says the company's 125th year in business would be marked as one of its most challenging.
"The significant progress we are making in strengthening our underlying business through growing, packing, marketing and selling premium, high quality fresh produce to Kiwis and consumers around the world is unfortunately not reflected in our financial results, given the challenges faced in 2022 with unfavourable growing conditions, rising costs and supply chain constraints," says Edgecombe,
The Envy quality issue arose mainly from heavy rains before and during the 2022 harvest.
Supply chain disruptions then delayed the arrival of fruit into markets, especially Asia. While the business moved quickly to withdraw fruit which was below consumers' expectations, the price of remaining inventories softened and some disposals were required.
"We are confident that our response protected the value of the brand and customer and consumer confidence in it," says Edgecombe. "We undertook a full analysis to understand the contributing factors and implement learnings should similar conditions occur in the future."
Apples operating profit decreased from $40.6m in 2021 to $27.8m in 2022, and revenue decreased by $76.8m to $774.6m.
T&G Global chair and BayWa Global Produce chief executive officer, Benedikt Mangold, says although the financial results reflected a difficult year, the company's transformation programme, while constrained by Covid, is building the strong foundations needed to accelerate the growth strategy.
Commenting on the damage caused by Cyclone Gabrielle, Edgecumbe says at this stage it is too soon to know the financial impacts.
"Our hearts go out to all of those affected by the cyclone, and especially our team members, seasonal RSE workers and our partner growers, who are grappling with their own losses and damages," says Edgecombe.
Harvesting in the Hawke's Bay had commenced ahead of the cyclone and has resumed in some of the company's and partners' orchards, following robust health and safety assessments. Harvesting will also soon be underway in Nelson and Otago, which were unaffected by the cyclone.
