29 Aug 2011

Kiwifruit vine disease impacts on Seeka asset value

7:23 am on 29 August 2011

The country's largest kiwifruit operation, Seeka, says the vine killing disease PSA has been challenging for the company and its contract growers.

The company, which has just released its half year results, says the disease has increased operational costs and forced a revaluation of assets but has not reduced the company's cash flow.

The six monthly report says despite contract growers losing 300,000 trays of gold kiwifruit to the virulent strain of the disease, PSA V, the company managed to pack a record 24.6 million trays, up 2 million on last year.

Total revenue was $98 million, in line with expectations, with the net profit after tax down just under $2 million.

Chief executive Michael Franks says PSA V has, however, had an impact on several aspects of the business.

He says at the end of June the directors revalued Seeka's land and building assets down $7.6 million.

Mr Franks says the disease was detected in two of its long term lease orchards.

In one, the disease hasn't been contained and vines have been pulled out. The directors have written down the orchard value by $572,000.

The disease outbreak in the other lease orchard was minor, he says.

Mr Franks says PSA has created uncertainties across the whole kiwifruit industry and could have a significant impact on the national economy.