Zespri reported to around 500 grower-shareholders today at its Annual Meeting on a record 2016/17 season, with global sales up 19 percent from last season to $2.26 billion on the back of exceptionally high yields.
Zespri Chairman Peter McBride explains the high yields and late start to the New Zealand season meant lower per-tray returns for Zespri Green but continued strong per-hectare returns for the Green business.
“A particular highlight was the performance of SunGold which saw a sharp increase in both volume and per-tray returns – up 39 percent to $98,838 per hectare and five percent per tray to $8.64,” says Mr McBride.
The Annual Meeting reported on Zespri’s financial year to 31 March, covering the performance of NZ kiwifruit sold in the 2016 season with sales running from April to November each year and Zespri’s counter-seasonal Northern Hemisphere season with fruit sold from October to March. Most of Zespri’s fruit is from New Zealand and the company also sources fruit from Italy, France, Korea and Japan to supply key retail customers with Zespri-branded fruit all year round.
Here in New Zealand, Zespri runs four product pools to supply the market: Zespri Green, Zespri Green Organic, Zespri Gold and Zespri Sweet Green.
|Pools (Fruit Categories)||2016/17 final (per tray)||2016/17 final (per hecatre)||2015/16 final (per tray)||2015/16 final (per hectare)|
|Zespri Green||$4.36 ||$53,555||$5.13||$56,673|
|Zespri Organic Green||$6.86||$54,427||$7.18||$52,917|
|Zespri Gold varieties||$8.64||$98,838||$8.21||$71,080|
|Zespri Green14||$5.79||$45,853||$7.012015/16 final (per hectare)||$42,995|
Zespri’s Northern Hemisphere supply
Mr McBride outlined to shareholders the growth in Zespri Global Supply, Zespri’s 12 month business.
“Volumes in this business grew from 14.5 million trays to 16.6 million trays for the reported season with sales in this business growing from $183.6 million in 2015/16 to $215.6 million in the reported period with contributing operating profit growing from $10.4 million to $11.9 million. A highlight was the strong gold growth of 46 percent from the previous season (from 3.6 million trays in 2015/16 to 5.3 million trays) and the extra 1,800 hectares of SunGold licence to be allocated in Europe over the next five years will see European volumes quadruple over the next five years,” says Mr McBride.
Mr Jager explained Zespri’s corporate income comes from four main revenue streams as outlined below.
|Corporate revenue stream||Amount||Increase on last season||Earned from|
|Commission income from selling NZ fruit (less loyalty premium to growers)||$159.0 million||19%||$2.02 billion sales|
|Commission income from offshore grown fruit||$26.5 million||18%||$216.0 million sales |
|Royalty income from proprietary products ||$16.7 million||170%||54.7 million trays sold |
|Revenue from SunGold licence sales ||$67.2 million||2500%||400 hectares licence released plus treasury stock and shelter belt issuances. No issue in previous year.|
Net profit after tax more than doubled from $35.8 million to $73.7 million, due mainly to the $67.2 million in licence revenue from the New Zealand SunGold tender in 2016.
Upcoming consultation with shareholders over constitutional changes
Official resolutions from the meeting including elections for the Zespri Board and the Director Remuneration Board, along with approving the annual accounts and appointing the auditor.
More significantly Mr McBride spoke about an upcoming Special General Meeting planned for March next year where Zespri will seek shareholder approval for constitutional changes to align shareholding more closely with production following the recently announced changes to the Kiwifruit Export Regulations.
Zespri Chief Executive Lain Jager says the industry is in good heart. “Strong returns and confidence are underpinning strong orchard values in the sector and Zespri is focused on delivering value for growers by investing to grow demand around the world,” says Mr Jager.