28 Feb 2024

Seeka reports $14.5m loss, less kiwfruit sold

10:45 am on 28 February 2024
Kiwifruit is a popular fruit to grow in Tairāwhiti.

Generic image. Photo: RNZ / Angus Dreaver

The country's largest kiwifruit grower, Seeka, has reported a $14.5 million loss due to lower kiwifruit volumes last season.

The full-year loss compares to a net profit after tax of $6.5m in the 2022 financial year.

Chief executive Michael Franks said yields were down across the industry, with Seeka only handling 30 million trays of class 1 New Zealand kiwifruit in 2023, compared with 42 million in 2022.

Trays of the green Hayward variety were down 36 percent on the season before while Sungold volumes were down 25 percent.

Franks said while 2023 volumes were materially down, Seeka's operational performance between the orchard and point of sale was excellent.

"More than 99 percent of the kiwifruit we packed for our growers was delivered on time and in spec to the marketer Zespri, and the quality of our fruit supplied to the international consumer was the best in the industry.

"The large drop in kiwifruit volumes, however, reduced Seeka's revenue for the year to $301m, down from $348m in 2022. This contributed to a full-year loss of $14.5m after tax in 2023, compared to a $6.5m net profit in 2022."

The business also struggled with low returns for avocados.

"It's also been a hard year in that space as well and mainly due to an abundant crop in Australia which has depressed market prices over there," Franks said.

"So growers in New Zealand have received very low returns because the Australian market's been so poor and we've had to pivot into Asia, which is far more competitive."

Franks said as a result of the loss, Seeka had reduced its capital expenditure.

"We had been gearing up with new machines and and pushing a lot of automation into the business to to handle anticipated higher volumes, so we've slowed that down and slowed that rate of expenditure down to within depreciation now and just sort of taking a more jaundiced view to our capital programme.

"But in saying that we're still doing the capital maintenance that we need to do to make sure that we're running a safe company."

Seeka expected to return to profit this financial year with a bumper kiwifruit crop and stronger pricing forecast.

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