Thursday, 09 September 2021 09:25

Hort earnings tip Scales' half-year results

Written by  Staff Reporters
Scales Corporation managing director Andy Borland. Scales Corporation managing director Andy Borland.

Scales Corporation, the owners of the country’s largest apple packing and marketing business, has reported an improved half year result.

For six months ending June 30, the company made a net profit of $33.3 million, up 15% on the previous year.

Despite challenges, Scale’s horticulture division delivered underlying gross earnings of $38m, $1m better than 2020.

Scales owns the Mr Apple business, New Zealand’s largest grower, packer and marketer of apples. It grows apples on more than 1,100 hectares of orchards in the Hawke’s Bay.

Mr Apple’s total halfyear export volumes are forecast to be 3.6 million tray carton equivalents (TCEs), a drop of 300,000 TCEs.

Scales managing director Andy Borland says the horticulture division delivered a very strong performance – despite being impacted by a shortage of skilled RSE workers together with ongoing disruptions in global markets and supply chains.

He says volumes were affected by inclement weather in the key growing season. However, higher pricing offset these lower volumes – as well as the increased labour and shipping costs that were incurred.

“We are cognisant of the need to focus on increasing labour cost and availability issues and, accordingly, are pleased to note that we have commenced a 10-year strategy to improve efficiency and returns through automation. The first step of this journey was the development of our new Whakatu coolstore, which has already delivered a number of efficiencies this year.”

Scales’ other business divisions include food ingredients and logistics.

Borland says the strategic value of Scales Logistics is significant.

“During a period of global supply chain issues, together with a domestic shortage of refrigerated containers, Scales Logistics ensured all its horticulture customers were able to ship their 2021 harvests. This expertise provides a significant strategic advantage to the group.”

Full-Year Guidance

The solid half-year results have helped Scales Corporation upgrade its full year net profit guidance to be between $32 million and $37 million.

Scales chair Tim Goodacre says the company still anticipates disruptions to domestic and international operations, including labour availability, global markets and supply chains due to the ripple effects of Covid-19.

“This can be evidenced by the current lockdown in New Zealand,” he says. “However, we believe our diversified focus will go some way to mitigate these issues.”

Goodacre adds that the company is aware that it cannot operate during lockdowns without its team, “and their health and safety will continue to be our foremost priority”.

National

Marketing blast for Rockit

Gaining momentum from the global roll-out of its new brand in July, NZ fruit company Rockit has recently launched its…

Zespri celebrates in style

The contribution of NZ's kiwifruit industry came in for some high praise at a special function at Parliament, just before…

Keeping NZ kids healthy!

New Zealand's fresh fruit and vegetable sector has signed a new two-year deal with the Government to continue supplying produce…

Machinery & Products

Smart way to bumper crops

With kiwifruit being the "go to" good food of the 21st century, it was inevitable that orchard prices would skyrocket.

Taking spud harvest to next level

With more than 40 years of two and four-row self-propelled harvester production behind them, the latest Dewulf harvester - imported…

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Too many hits?

OPINION: Well-known professional protestor, John Minto has run off at the mouth without checking his facts.

Good question!

A mate of the Hound's thinks it was more than a bit dodgy when DairyNZ chair Jim van der Poel…

» eNewsletter

Subscribe to our weekly newsletter