25 May 2011

Kiwifruit vine disease lowers Zespri profit

9:39 am on 25 May 2011

Kiwifruit marketer and exporter Zespri has reported a 71% fall in its full year profit due to the cost of fighting the PSA vine disease and to increased payments to growers.

The company made $7.3 million in the year to the end of March, compared with $25.9 million the previous year.

Sales rose 1% to $1.51 billion due to strong growth in Asia and rising prices, which offset lower yields, higher freight costs and a higher New Zealand dollar.

But battling PSA cost Zespri nearly $13 million, and the marketer also increased the loyalty payment to growers from 15 cents to 25 cents a tray.

Despite the profit fall, Zespri announced a lift in total payments to growers for last season.

Zespri chief executive John Loughlin says total returns to growers for the 2010 season are just over $883 million, up 4% on the year before.

Mr Loughlin says he's expecting another tough year, and he's expecting pressure on returns.

Apart from higher costs, including contributing another $2.6 million to fight PSA, Zespri says increased volumes of gold and organic green kiwifruit will dampen international prices.