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Apples help Scales lifts first-half profit

NZN 24/08/2016 Paul McBeth

Agribusiness Scales Corp has lifted first-half profit 3 per cent and raised guidance for annual earnings as its Mr Apple unit delivered a record crop and met a 2020 export volume target four years early.

Net profit rose to $33.8 million in the six months ended June 30 from $32.8million a year earlier, the Christchurch-based company said on Thursday.

Revenue jumped 30 per cent to $209.5m, while earnings before interest, tax, depreciation and amortisation increased 3 per cent to $54.2m. That performance was underpinned by Scales' Mr Apple unit, with apple exports up 12 per cent to a record 3.55 million TCEs (tray carton equivalents).

"This is an excellent achievement from the entire Scales team and especially the Mr Apple team, which has delivered another record crop on existing resources and infrastructure," managing director Andy Borland said.

"Mr Apple has packed a record 3.55 million TCEs, which is 12 per cent above 2015 export volumes and meets a 2020 volume target four years ahead of schedule."

New Zealand's biggest apple exporter doubled its annual profit in 2015, selling higher value products to key markets in Asia and the Middle East, beating the forecast in its 2014 prospectus.

In December, Scales said that result wasn't likely to be repeated, predicting a more ordinary harvest for 2016, an absence of insurance proceeds from a hailstorm last year and some provisioning for reduced use of its coldstore network.

Scales on Thursday said it expects ebitda of between $55m and $62m in the calendar year, up from a previous forecast of $48m to $55m. Net profit is expected to be between $29.6m and $34.6m.

Scales' board will consider an interim dividend payment later in the calendar year, with its policy to split returns evenly and pay them in January and July.

The shares last traded at $3.50 and have climbed 46 per cent this year.

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