KEY POINTS:
Satara has delivered a record first half result but growers can expect a year of financial hardship, says the listed kiwifruit co-operative.
Net profit at the packing and growing company for the six months ending June 30 was $1.3 million, compared to $945,507 the previous year, with revenue of $37.3 million up from $34.7 million.
Exceptional growing conditions, the largest crop ever supplied and a successful packing season lay behind the result.
However, the first market return forecast by kiwifruit exporter Zespri indicated the next year would be one of relative financial hardship for growers. The return on the majority green kiwifruit was forecast to drop by $1.01 to $6.40 a tray.
Satara group general manager Murray Gough said the scale of hardship would depend upon the circumstances of the individual grower.
"What we know is that the Zespri forecast market return makes life tough for most growers but not everybody gets exactly the same return," Gough said.
Growers' principal income came from the Zespri return, which was affected by the exchange rate.
"If exchange rates fall dramatically then there will be an improvement in the forecast but a lot of the damage is already done," Gough said.
"It is a case of riding this season out to a large degree and beginning afresh for next season hopefully under better foreign exchange conditions."
Chairman Andrew Fenton said that because of Zespri's forecast Satara would be down slightly on the previous full-year predication of operating profit before tax and rebate of $5.1 million given in April.
"The final result will be dependent on the actual fruit value for the 2007/08 season which impacts several parts of the business to varying degrees," Fenton said.
Despite the cut in full-year expectations Satara's board decided to pay an interim rebate of 10c per packed class 1 tray to all transactor shareholders.
The dividend would be paid because of the challenges facing growers and a favourable full-year forecast for the company's post-harvest division.
The crop volume was up by 1 million trays on last year at 12.5 million trays, ensuring full utilisation of packing facilities.
Fruit loss in cool store was lower but a higher than usual reject rate had increased processing costs, with labour costs also higher because of changes to minimum wage regulations.
Efficiencies achieved through implementing packing technology and the management of staff had mitigated much of the increased costs.
Shares closed unchanged at $1.10.
SATARA
Six months ending June 30
Revenue
2007 - $37.3m
2006 - $34.7m
Operating surplus
2007 - $2m
2006 - $1.4m
Net profit
2007 - $1.3m
2006 - $945,507
Rebate
2007 - 10c
2006 - nil
