22 Feb 2024

Scales Corporation reports 35 percent drop in profit

1:20 pm on 22 February 2024
Full bowl of dog food close up on wooden background, pet food

(file image) Photo: 123RF

Apple, pet food and logistics group Scales Corporation has reported a drop in profit of 35 percent for the full year ended December 2023.

Key numbers for year ended December 31 compared with a year ago:

  • Net profit $24.7 million versus $38.2m
  • Revenue $565.4m versus $619.2m
  • Horticulture underlying profit $14.8m versus $19m
  • Global proteins operating earnings $54.5m versus $60.2m

Corporation chair Mike Petersen said: "Our diversified strategy has, once again, proved to be an important factor in our success in what was a disruptive year.

"This, combined with the ability of our divisions to execute their individual strategies during testing times, produced very commendable Group earnings," he said.

"Global Proteins and Logistics performed strongly, with horticulture producing an admirable result, having dealt with the significant effects of Cyclone Gabrielle during the year. This is in no small part due to the skills and resilience of the entire Scales team."

Managing director Andy Borland said Global Proteins delivered a solid result in a year when its pet food ingredient customers were rebalancing their inventories to lower, pre-Covid levels.

"This resulted in lower volumes sold. Despite these new market conditions, the division performed well, adjusting its operations accordingly," Borland said.

"The joint venture with Esro Food Group has provided a strategically important European presence for Scales' Global Proteins division. Significant progress has been made on this operation, with the first processing line commissioned towards the end of the year."

Commenting about the horticulture division, Borland said Apple's own-grown export volumes were down on the year prior.

"Export volume of 2733k TCEs was 18 percent down on the prior year (FY2022: 3324k TCEs). However, Mr Apple experienced a strong finish to the season due, in part, to limited supply in key markets, which in turn contributed to higher in-market pricing," he said.

"Mr Apple continues to focus on the supply of Premium varieties such as DazzleTM and PosyTM to the Asia and Middle East markets, a strategy that is supported by increasing in-market prices.

"Development of these varieties was accelerated during 2023 and we anticipate higher sales volumes as plantings mature."

Petersen said looking ahead the company anticipated a more normal year of trading, particularly for horticulture.

"We anticipate that our petfood customers will continue to rebalance their inventory levels to pre-Covid levels and note that Meateor Australia and Esro Petfood will continue to progress through their transitional and start-up phases respectively.

"We look forward to realising exciting opportunities from these key markets in the long-term.

"Picking and packing has commenced at Mr Apple for the 2024 season and current crop indications are positive. There is also strong initial demand for our early fruit."

Borland has been reappointed for a further five-year term as managing director.

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