26 Feb 2020

Apple exporter poised for growth after solid earnings report

2:22 pm on 26 February 2020

Apple exporter Scales Corporation has posted a higher full year profit of $121.6 million, boosted by $78m in asset sales and improvement in its food ingredients division.

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Photo: RNZ / Tracy Neal

Revenue was up 20 percent to $484.6m, which included the first full year's trading of the petfood company, Shelby Foods, which Scales acquired 60 percent of in 2018.

Managing director Andy Borland said its horticulture division remained strong, despite an adverse Europe market.

"The braeburn was a challenge for us. We've told our outside growers ... we're penalising them if they don't reduce their braeburns. That was certainly the variety that was most challenged in Europe last year.

"This year's crop from New Zealand is going to be significantly down on last year's volume ... and we're going to have to keep looking at it, in terms of its volume in the orchard."

Overall, horticulture delivered an EBITDA of $39.7m compared to $42.6m in 2018.

Borland said orchard redevelopment was underway and significant plantings of the Dazzle and Posy types, popular in Asia and Middle East.

He said the company, which also has a logistics division, would continue to diversify and look for new projects.

"We're looking actively ... nothing I can discuss at the moment as there's nothing agreed but we're looking to keep investing in apples, food ingredients and in logistics and we would look at a completely new division of the agribusiness scene that we could add value to.

"All three businesses are well-placed to have another strong year, we've got a good crop coming on.

"The markets are watching with interest this Covid-19 virus and the impact that's going to have. We're seeing our apples being shipped to China we're expecting them to get across the ports all right and into the market and we're hoping that remains the case."

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