Scales Corp’s fullyear earnings in line with guidance

CHRISTCHURCH: Scales Corp said its fullyear earnings were in line with guidance as its Mr Apple unit reached record export volumes.

The agribusiness group said underlying earnings before interest, tax, depreciation and amortisation were $67.1 million in the year to December 31. In December, it said ebitda would be at the top end, or would slightly exceed guidance of between $58 million$65 million.

Underlying revenues reached a record $464.70 million, up 18% on the year.

Net profit was $45.5 million, up 44% on the year, it said.

Underlying net profit was $35.8 million, up 9% on the year.

Scales is still waiting for Overseas Investment Office approval for the sale of its Polarcold cold storage unit.

The due date for that condition has been extended to May 31.

It also sold bulk liquids storage division Liqueo in the year.

The two sales had combined proceeds of $171.4 million, it said.

The Christchurchbased company plans to use those funds to buy agribusinesses more closely aligned with the rest of its portfolio, and has indicated it is interested in businesses that are fully vertically integrated, exportfocused and can benefit from its relationships in China.

Its first investment was in its food ingredients division, when it bought 60% of USbased Shelby Foods for $US23.2 million ($NZ33.6 million) in December.

‘‘We hope that this will be the first in a series of successful investments,’’ said chairman Tim Goodacre. The board declared a fully imputed dividend of 9.5 cents per share, up from 9 cents a year when it gave guidance last December.

Its horticulture division had underlying ebitda of $42.6 million versus $38.9 million a year earlier, as Mr Apple’s owngrown export volumes were up 9%, despite a slight reduction in packouts, the proportion of the crop to reach export quality, to 76% from 80%.

‘‘More pleasing was that volume growth was concentrated in sales of premium varieties, which collectively recorded volume growth of 18% over 2017 export volumes,’’ the company said.

Mr Goodacre said the outlook also remains positive.

‘‘The 2019 apple harvest is under way and early crop indications support a return to longrun packout rates,’’ he said.

The firm will also make its first commercial sales of its new Dazzle and Posy varieties this year.

The storage and logistics division saw a 10% lift in ebitda to $21.1 million, while the food ingredients division generated underlying ebitda of $10.2 million versus $8 million a year earlier.

The company said it expects activity in the logistics division to remain at 2018 levels and said that initial trading in the food ingredients division is in line with expectations.

It did not provide ebitda guidance for the current financial year, however, as the sale of Polarcold remains subject to OIO approval and ‘‘in line with our growth strategy, Scales continues to make positive progress on a number of initiatives, some of which may be agreed in the near term.’’