2010/11 Forecast Grower Returns

Media Release - 21 May 2010

ZESPRI has announced an indicative range of grower returns for the 2010/11 season, following a steady performance for the 2009/10 year.

The indicative range of returns, released by New Zealand’s largest horticultural exporter this week, show that returns for ZESPRI® GREEN Kiwifruit are expected to increase slightly on last year, and that ZESPRI® GOLD Kiwifruit returns are likely to hold steady with the 2009 result. ZESPRI® GREEN ORGANIC Kiwifruit is expected to have another challenging year, reflecting an increase in supply and mix impacts for this category.
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The ZESPRI Board also expects to pay a per-tray loyalty payment of 25 cents for the 2010/11 season, compared to 15 cents per tray in 2009/10 and 16.5 cents per tray for the 2008/09 season.

ZESPRI Chief Executive, Lain Jager, said this is a very early indication of returns and ZESPRI won’t release the full forecast until August. However, early season sales have given ZESPRI confidence that the markets will respond positively to the excellent eating quality of the fruit this year.

“What we’ve seen is lower crop loadings resulting from poor fruit set not translating into the large profile we would normally expect to see, because of very dry weather across much of the country. This has translated into very high dry matters and excellent sugar levels in the 2010 crop. Together with strong early season delivery, we are well positioned for the season and expecting a modest recovery in local market returns, following a very challenging season last year,” Lain said.

"We have clear plans in place for each category and these are set out in our three-year category outlook documents – to be published again in November. For now the focus is on working closely with our customers to achieve the best result possible for growers with the excellent fruit quality we have been blessed with this season,” he said.

ZESPRI delivers stable results for 2009

ZESPRI also announced its financial results for the year ending 31 March 2010 this week, which represent satisfactory grower returns in a year characterised by the financial crisis and devastating returns for many fruit growers around the world.

ZESPRI’s net global kiwifruit sales increased three percent from $1.451 billion in 2008/09 to $1.501 billion in 2009/10. New Zealand-sourced kiwifruit volumes sold decreased by one percent to 98.5 million trays, predominately because of crop management and hail damage.

Average Fruit and Service Payments increased by seven percent on last year, to $833.9 million, and by eight percent on a per-tray basis, to $8.17 across all categories.

Despite managing the season well pricing was under pressure, particularly for ZESPRI® GREEN and ZESPRI® GREEN ORGANIC Kiwifruit. However, this was counterbalanced by more favourable freight costs and positive exchange rate movements which contributed $37.5 million and $76.5 million to the final return respectively.

ZESPRI reported a consolidated net profit after tax of $25.9 million for the year ending 31 March 2010, compared with $23.9 million in the year prior.

ZESPRI Board Chairman, John Loughlin, said: “Achieving a modest increase in returns in what was a very challenging market environment, reflects the tremendous performance by ZESPRI, our growers, post-harvest operators and our distribution and retail partners in the markets.”

The Board has announced its intention to declare a final dividend of 35 cents per fully paid share for payment in August 2010, in addition to the interim dividend of 35 cents per share paid in December 2009. This brings the total dividend for the 2009/10 year to 70 cents per share, representing 78 percent of distributable profits.

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