Positive first year for ZAG fund
As it enters its second year, Zespri says the first year of the Zespri Innovation Fund (ZAG), has been “really positive”.
The total fruit and service payment to growers increased 6% to $1.47 billion. Zespri’s global kiwifruit sales for the year were also up 6%, at $2.39 billion. Total revenue, which includes licence income, was $2.51 billion.
Zespri Chairman Peter McBride notes the uplift in value reflects strong consumer demand and excellent market performance.
“We sold a record volume of SunGold while growing returns at both per-tray and per-hectare levels. Supply of Green and Organic Green reduced considerably from the exceptionally high volume of the previous year, but very strong consumer demand more than offset the impact on per-hectare returns for Green and mitigated the impact on Organic Green per-hectare returns.
“The industry’s performance during the last season reinforces our confidence in our strategy and potential for strong and
Zespri’s net profit after tax in 2017-18 increased 38% to $101.8 million. The result was primarily driven by revenues from the release of 400 hectares of SunGold licence in 2017, as part of Zespri’s continuing programme to fulfil strong consumer demand.
The total dividend returned to shareholders was 76 cents per share, versus 25 cents per share in the previous season. The payout included an additional interim dividend of 50 cents per share to distribute the majority of funds generated through the 2017 SunGold licence round.
Sales volumes through the non-New Zealand supply segment, essential in enabling Zespri to serve consumers with premium kiwifruit 12 months of the year, fell by 8 percent. Supply of Green was reduced because of a damaging frost in Italy. However, SunGold sales in Italy increased to offset the fall, with the Zespri Global Supply business recording total sales revenue of $264 million, up from $217 million in 2016-17.
McBride says that Zespri delivered a good sales result for Green. The average per-tray return for Green was considerably stronger at $6.71 (2016/17: $4.36). “This was supported by good quality and low rates of onshore fruit loss. The average per-hectare return for Green across the industry was $59,981, a new record for the category, and the result was achieved in spite of a 27% decline in average yields.”
The result for SunGold gives confidence in our long-term outlook, adds McBride.
