Apples spoil T&G's half-year

Produce company Turners & Growers says apple export problems are the main reason for its unaudited profit before tax for the June half year falling from $8 million to $6 million.

Revenue dropped 12.8 per cent to $248.6 million and earnings before interest and tax fell 20.6 per cent to $9m. No dividend has been declared.

Three weeks ago the company, which owns Enza, the biggest marketer of New Zealand apples, issued a downgraded profit forecast because of the apple problems.

In the half-yearly report Turners & Growers said it estimated its full-year result may be down somewhat on last year, "although not by large amounts".

The report said apple exports had started slowly last season due to climatic factors and there had been a reduction in shipments.

The late start to the season had been compounded by an oversupply of the European market, which also held carryover stocks of last season's Northern Hemisphere fruit.

British fruit sales had been steadier than in Europe and it was hoped prices would hold up in the later part of the season.

North America had generally achieved good prices to date with the exchange rate being the main challenge. But some evidence of weakness was emerging with the arrival of Northern Hemisphere new season varieties, and because of unnecessarily low price offers from other New Zealand exporters.

While there was serious concern about New Zealand apple growers continuing to pull out trees of the traditional varieties or exit the industry, the report said Enza remained confident of a longer term future for the new jazz variety in which it held exclusive world-wide production and marketing rights.

"Our medium and longer term future in pipfruit is also predicated on our involvement with jazz, which we are confident will prove a strong strategic advantage."

Apart from prices and exchange rates, the report said the company's concern was a continuing loss of production as growers moved to alternative land uses.

Overall in the fresh domestic sector, the company said it appeared to be holding market share with results up on the equivalent six months of last year.

- NZPA