Ripening division sweetens outlook for Seeka
Seeka Kiwifruit Industries, the largest kiwifruit grower in Australia and New Zealand, says profit for this year will be at the upper end of its guidance.
In August the company said it expected profit to rise by between 30 per cent and 40 per cent this calendar year. Seeka’s shares hit an eight-year high of $3.75 off the back of the announcement.
However, in October it warned investors that profit could be lower due to uncertainty about whether some of the fruit lost in the fire in Bay of Plenty was insured, and said profit could be anywhere between 10 per cent and 40 per cent above 2014 levels.
The company yesterday said net profit would be between 25 per cent and 35 per cent above 2014 levels, driven by improved results from its Glassfields divison, which provides ripening and delivery services to retailers.
Profit from New Zealand operations was expected to be between $3.96 million and $4.27 million.
Seeka also paid just over $4 million to its pool of growers to maintain payments and minimise the risk of loss from the fruit that was destroyed or damaged in the fire.
This money will be recovered from any further insurance proceeds should the claim be accepted by the insurer, it said.
However, Seeka said its new Australian business would deliver an after-tax loss in the first year of its operation of between $750,000 and $1 million due to transaction costs and stamp duty.
It bought Bunbartha Fruit Packers for A$22 million in August, and the company said the business was proceeding well.
It was expected to be profitable next year.
Shares in Seeka closed up 1c yesterday at $3.37.