T&G lifts revenue but profit challenged by weather and tariff issues

Poor growing conditions for tomatoes in early 2018 and an oversupply in the domestic market late in the year contributed to a decline in operating profit. Photo / File

T&G Global lifted full-year revenue 11.2 per cent but a series of weather and tariff-related challenges saw its net profit plunge 63 per cent.

T&G said revenue was $1.2 billion in the year to December 31 but profit for the year fell to $8.3 million from $22.6 million in the prior year, in line with guidance given in December.

"Operational and environmental challenges in key business divisions and markets impacted T&G's 2018 financial result, including a poor New Zealand growing season for apples and the impact of Chinese tariffs," it said.

Its international produce division experienced adverse weather impacts on its cherry season in Australia and on the quality of its grape harvest in Peru, although its operating profit lifted to $3.1 million due to favourable tradition conditions in its markets, particularly the Pacific Islands.

In New Zealand, poor growing conditions for tomatoes in early 2018 and an oversupply in the domestic market late in 2018 contributed to a decline in operating profit of $8.2 million from 2017 to 2018.

T&G has turned its focus to growing its core businesses, which led it to divest several non-core businesses and investments during the latest period.

That included the sale of ENZAFoods to Cedenco Foods New Zealand and the sale of its Kerikeri-based kiwifruit orchards, post-harvest facilities and business assets to Seeka.

Its total assets reduced by $50.5 million, mainly through the sale of kiwifruit post-harvest facilities and orchard land, the sale of assets related to the processed foods business and the sale of property in Christchurch.

The shares, of which Germany's BayWa owns 74 per cent, were unchanged at $2.81 and are down around 2.1 per cent so far this year.

Looking ahead, T&G said the near-term future global trading environment remains uncertain, particularly with regard to Brexit and the US-Chinese trade dispute. However, it remains confident that the changes it is making will allow it perform strongly in the years ahead.