28 Feb 2012

Turners and Growers posts $18m loss

10:07 am on 28 February 2012

Turners & Growers' full year books have sunk into the red after large writedowns at its orchards.

The listed fruit marketer lost $18.9 million in 2011, a turnaround from the $6.3 million profit reported in 2010.

The company had to write down the value of its orchards and properties by almost $21 million last year because of poor pipfruit grower returns, the high New Zealand dollar and the effects of the kiwifruit vine disease Psa.

Managing director Jeff Wesley says the high New Zealand dollar is proving problematic.

"It's had a terrible impact on most exports particularly apple exports to the UK and Europe which is probably 65% of the apple exports," Mr Wesley says.

"It's dramatically affected returns to orchardists probably to the degree of between $3 and $6 a box."

He said the solution for New Zealand apple growers is to send more fruit to Asia, where prices and demand are increasing, and it's cheaper to send the produce there.

The company says when accounting for the writedowns, adjusted profit was an improvement on 2010 and was the highest for a number of years.

Revenue rose almost 8% to $645 million, but the company says the strong New Zealand dollar is making it very difficult to increase orchard gate returns.

Turners & Growers is the subject of a takeover offer by German agricultural trading company BayWa.

So far, BayWa has acceptances giving it almost 72% of the firm. The Overseas Investment Office is yet to approve the takeover.

The offer closes on 7 March.

Legal and advisory services, stemming partly from the takeover offer, cost Turners & Growers more than $3 million last year.