Strong 2019/20 Financial Result For Zespri Helps Support Regional New Zealand

2019/20 Financial Results Summary:

• Total Operating revenue: NZ$3.36 billion
• Total fruit sales revenue: NZ$3.14 billion
• Total New Zealand-grown fruit and service payments: $1.96 billion
• New Zealand and Non-New Zealand trays sold: 164.4 million trays
• Zespri’s net profit after tax NZ$200.8 million
• Expected Total Dividends: NZ$0.94

Almost NZ$2 billion was returned to New Zealand’s kiwifruit industry following Zespri’s 2019/20 season, helping support thousands of businesses, workers and regional communities around the country.

Zespri’s 2019/20 Financial Results show total fruit and service payments, which are returns direct to the New Zealand industry, increased by 8 percent year on year to NZ$1.96 billion.

Zespri’s total operating revenue was NZ$3.36 billion, up from NZ$3.14 billion, with global revenue from fruit sales increasing by 7 percent to NZ$3.14 billion. This was based on the sale of 164.4 million trays of New Zealand and non-New Zealand-grown kiwifruit, a 2 percent reduction on the previous year.

There were strong results across each fruit category:

• The average Green per tray return increased to NZ$6.67, with the average per hectare return for Green reaching a record high of NZ$67,295.
• Organic Green reached an average return per tray of NZ$9.88, with the average per hectare return reaching NZ$63,734.
• The SunGold average return per tray increased to NZ$11.86, and the average return per hectare was also a record NZ$161,660.
• Sweet Green achieved an average return per tray of NZ$7.66 and an average return per hectare of NZ$43,550.

The 2019 SunGold licence release round generated gross licence revenue (excluding GST) of NZ$211.9 million.

Zespri’s Net profit after tax was NZ$200.8 million, up from $179.8 million in 2018/19. The Board expects the total dividend for 2019/20 to be $0.94 per share, up slightly from $0.92 in 2018/19.

Zespri Chairman Bruce Cameron says the results are incredibly encouraging for the industry and the wider New Zealand economy during a time of so much economic uncertainty.

“Working with the New Zealand industry, we’ve continued to strengthen Zespri’s reputation for providing the world’s leading portfolio of branded kiwifruit for 12 months of the year, which drives stronger returns for New Zealand growers and our communities.

“The result reflects the hard work Zespri and the industry are undertaking to both grow supply and add value through a world-leading brand and a premium product,” Mr Cameron says.

Chief Executive Dan Mathieson says it was an incredibly encouraging year, with the industry working hard in New Zealand and the markets to manage quality and deliver more than 5 billion pieces of Zespri Kiwifruit to people all over the world.

“Overall, 2019/20 was another strong year for Zespri with continued growth in our largest markets including Japan, Greater China and Europe.

“On top of strong returns we achieved some real milestones last season including commercialising the new Zespri Red Kiwifruit variety, opening our new Head Office in Mount Maunganui, launching our new brand, announcing our sustainability targets and investing more than ever in communities.

“Within our business, we’ve focused on creating more value and continuing to put consumers even more in the centre of our decision-making.

“We’ve also made excellent progress in building our business for the future and investing in the systems we need to continue to grow.

“Looking ahead, we’re excited about continuing to roll out our refreshed brand identity, and providing the world with even more healthy, fresh and great-tasting kiwifruit all year round,” Mr Mathieson says.

People, Communities and the Environment

Mr Mathieson says Zespri had also made strong progress on delivering on its purpose of helping people, communities and the environment around the world thrive through the goodness of kiwifruit.

“Across 2019/20, we invested significantly around the world as part of our efforts to strengthen communities. That saw us support food rescue charities, the training of lifeguards, a kiwi breeding programme, multiple scholarships and health charities.

“We also launched the Zespri Young and Healthy Virtual Adventure, which will see us working with primary schools around the country to promote healthy lifestyles, and we helped support those most in need as part of our response to the challenge posed by COVID-19.”

With Zespri launching its sustainability targets in 2020, Mr Mathieson says Zespri will continue its focus on important issues such as becoming carbon positive, developing measures to monitor and improve the industry’s impact on waterways, and doing even more to support communities and our workforce.

Outlook 2021

Mr Mathieson says 2020/21 is shaping up as another strong year.

“The response from the industry to COVID-19 has been incredible, coming together to ensure we could get fruit off the vines and into market in spite of the restrictions both here and offshore.

“This coming season is one of our best-ever tasting crops and largest by volume, albeit with smaller Green due to the dry weather, and demand around the world is significant, driven both by Zespri’s investment in sales and marketing as well as by demand for safe, healthy foods which are high in Vitamin C.

“We’re continuing to see strong growth in our largest markets, including Japan, China and Spain, and making real progress in newer ones like the US and also continuing our efforts to get closer to consumers and to broaden our sales channels.

“Some sales restrictions remain including on point of sale promotions in some markets but our teams have adapted, with a greater focus on in-home media and the health benefits of Zespri kiwifruit, and of course our new brand is looking outstanding. I’d also like to acknowledge the support we received from our communities in New Zealand during the COVID-19 lockdown which helped with this year’s harvest.

“Risks to our outlook include wider concerns around consumer purchasing power being negatively affected by the global economic turmoil, changes to the normal flow of fruit trade and also potential disruption across our global supply chains. Zespri remains focused on ensuring we’re able to respond to such eventualities and on delivering returns to growers,” Mr Mathieson says.

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