Bumper apple season drives T&G’s showing

AUCKLAND: A bonanza New Zealand apple season which delivered significantly better fruit sizes, volumes and quality, plus Covid19driven demand in some international supermarkets made T&G Global's apple business the star performer of a much improved 2020 financial year.

The apple business delivered a revenue increase of 24% to $875.2 million for the year to December 31, which along with efficiency gains, boosted operating profit by 56%, from $33.5 million in 2019 to $52.1 million.

T&G's major NZ apple markets are North America, Asia and Europe. The improved apple crop helped offset a reduction in packhouse throughput and increased supply chain costs due to Covid19. Total net profit after tax for the group was $16.6 million, up from $6.6 million in 2019.

Group revenue was $1.4 billion, compared with $1.2 billion the previous year. Operating profit was $32.4 million, against $16.5 million in 2019.

Chief executive Gareth Edgecombe said the year had been one of extraordinary Covid19related challenges, with international lockdowns and operations procedure changes affecting the daily running of the business.

The financial results followed a big effort to become customerled, deliver value from intellectual property and build a highperformance culture, he said.

The apples business had an ‘‘outstanding’’ year with the New Zealand Envy variety sold out ahead of the arrival of northern hemisphere fruit.

A focus on the best genetics, building premium brands and delivering strong sales in Asia while optimising its supply chain had all contributed to T&G's strong result, he said.

The acquisition of Freshmax New Zealand's fresh produce division for $27.9 million in April last year to create T&G Fresh resulted in a revenue increase of $75 million to $357.7 million.

T&G Global is 74% owned by German group BayWa Aktiengesellschaft.

Hong Kong's Wo Yang Ltd owns 20% and small NZ shareholders make up 95% of the remaining shareholders.

During FY20 the company's Nelson postharvest facility was sold for $50.5 million. It is being leased back. The proceeds would help fund growth initiatives and be invested back into T&G.

The international trading division posted a 21% drop in revenue, from $226.5 million to $178.7 million. But the operating result increased from $800,000 to $2.3 million.