Tuesday, 22 October 2024 09:55

Start of a turnaround?

Written by Sudesh Kissun

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Seeka chief executive Michael Franks.

In another sign of improving agribusiness sentiment, two listed companies have lifted their forecast earnings for the year.

Fruit grower and trader Seeka expects forecast full year earnings guidance at a profit before tax level of between $21 million and $25m. The forecast range compares to a loss of $21m last year.

Rural trader PGG Wrightson is forecasting earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $51m for year ending June 2025, compared to $44m last year.

The company says that while sheep farmers are facing challenging market conditions with soft returns, there are however some positive indicators suggesting the start of a turnaround, including good quality yields in the horticulture sector.

Seeka, a major player in the hort sector, attributes its improved forecast to a clear strategy, excellent fruit quality and performance, efficiencies and margins across the business. The turnaround has prompted Seeka to declare a dividend of 10c/share to be paid on January 25, 2025.

Seeka chief executive Michael Franks notes that a full year dividend is normally paid in April.

This year the full year dividend has been varied to provide a quicker restoration of dividends and provide an earlier return on investment to Seeka's shareholders, he says.

Franks says the company has achieved a good year.

Over at PGW, chair Garry Moore notes that the rural servicing market in New Zealand remains relatively challenged.

"Geopolitical tensions are contributing to cautiousness in the market and a slower than expected recovery in New Zealand's key export market. China continues to dampen commodity prices," he adds.

Sheep farmers are facing challenging market conditions with soft returns. Flock numbers are estimated to have reduced by 4.3%, down to 23.3 million. However, he notes confidence returning to the dairy sector with Fonterra and other processors forecasting a milk price of $9/kgMS for the season.

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