Zespri’s global net sales of kiwifruit exceeded $4 billion in its most recent fiscal year. photo / file
A higher-than-estimated cost of releasing quality kiwifruit and ongoing challenges weighed in on part of global retailer Zespri’s profit and loss guidance for this season.
Chairman Bruce Cameron told the company’s 2800 New Zealand growers in an updated forecast that tray yields for the best-selling SunGold kiwifruit and their organic counterpart are now below the June return gate to the orchard.
The Company’s after-tax net income guidance range for the fiscal year ended March 31, 2009 is now $225 million to $235 million, including grower license revenue.
The company’s after-tax profit for 2021-2022 was $361.5 million.
The low end of the new earnings guidance range is slightly below the low end of the August 2022 guidance range, Cameron said.
SunGold’s new forecast for 2022-2023 earnings per barrel is $9.81 compared to the August forecast of $10.02. SunGold’s November forecast per acre is $135,377 compared to $138,495 forecast in August. Organic SunGold is expected to yield $11.42 a barrel compared to $12.18 forecast in August.
Zespri green fruit yields are showing signs of resilience to quality impacts by maintaining August yield guidance. A tray of green fruit is expected to fetch $6.13, while the per-acre forecast for the variety is $61,304, a slight improvement from the August forecast of $61,144.
Recently commercialized red cultivar Zespri RubyRed is now expected to fetch $20.38 per tray versus August forecasts of $18.93 and $38,501 per hectare.
Cameron said the latest forecasts reflect the ongoing challenges this season, particularly when it comes to fruit quality.
Weekly milled fruit losses were higher than the August forecast and this season saw higher milled fruit losses in the four largest fruit groups.
“Offshore teams continued to identify opportunities to increase revenue and we saw positive movement in shipping and FX. However, offshore quality costs continued to rise more than originally estimated, particularly for gold (fruit) funds.’
All of Zespri’s main markets have updated their estimates for seasonal results to forecast higher fruit losses and quality claims, with Europe, China and Japan having the biggest impact on costs, Cameron said.
Excluding SunGold, projected average yields per acre remained within the June 2022 forecast.
The total payment for fruit and services across all fruit groups and excluding the loyalty bonus was estimated at $2.2 billion to $2.225 billion when revised market fruit allocations were announced following updates to expectations for fruit losses on land.
Cameron said Zespri, like its growers and supply chain partners, is facing headwinds “and finds itself in a very challenging economic cycle due to the challenges of reduced New Zealand supply in 2023 and an expected global recession.”
The Company has scheduled additional roadshow meetings to discuss the details of the new yield projections and update growers on the industry’s 2023 Quality Action Plan.