Seeka

[BlackPeter]

Kiwifruit returns not so juicy this year as rising costs and fruit quality issues bite

https://www.nzherald.co.nz/business/...IESSKLLPLTFZI/

Hammertime ?

246 shares sold for $4.55, i.e. SP down 1.1% at open. Bids already back up to yesterdays close ($4.60), but nobody selling.

What are you hammering? Doesn't seem to be the price ;

[Sideshow Bob]

Kiwifruit returns not so juicy this year as rising costs and fruit quality issues bite


https://www.nzherald.co.nz/business/...IESSKLLPLTFZI/

This has been known for a little while, and been publicised. Herald just a bit slow.....

This is Zespri on the USX last week: https://www.usx.co.nz/uploads/paperc...pdf?1660067269

Seeka has made mentioned to shareholders also

[bull....]

Key bit from the article, downgrade coming?

Prices were holding in most markets but "at present the indications are that conventional fruit returns are likely to be at the bottom and possibly even below the ranges published in June".

Mathieson said prices were holding in most markets but cost increases in freight along with labour and the quality issues meant "this season's returns will be under pressure".

that would be 2 downgrades then

[bull....]

see the herald got another story today

Alarm sounded over this season's export kiwifruit quality issues

a new report on Zespri by Craigs Investment Partners research analyst David Harris suggests the fruit loss is "of concern" and "a trend over recent seasons" both onshore and offshore.


Michael Franks, managing director of NZX-listed kiwifruit grower and packhouse operation Seeka, told the Herald the fruit quality issue this season is "major" with more than one symptom and no verified causes yet.

https://www.nzherald.co.nz/business/...7EEOMKZJQZSZI/

[GTM 3442]

Seeka have good years, average years and bad years.

This is good, because it gives you some pretty clear buy/hold/sell signals. Even a fool like me can (usually) read them.

[Grimy]

Down to 4.37. Will be interesting to see which way the sp goes after tomorrow's presentation.
I might even listen in. If I'm not outside clearing drain grates..........

[turnip]

Most of my horticultural investments (mainly NZ/AU based, biggest is Seeka) are down this year, but my other food investments (mainly US based manufacturing, biggest is SunOpta) are up strongly, so I have some rebalancing to do.

[peat]

Seeka have good years, average years and bad years.

This is good, because it gives you some pretty clear buy/hold/sell signals. Even a fool like me can (usually) read them.

yes quite amazing the price took so long to slide today after the Herald article quoted in another post. but no doubt selling volume wouldve been a problem
If this was Fletchers I'd be out but as a portfolio stock at 5% and on a longer term basis I have some confidence in the management so will ride out the storm.
I've always acknowledged horticulture as risky.

[iceman]

yes quite amazing the price took so long to slide today after the Herald article quoted in another post. but no doubt selling volume wouldve been a problem
If this was Fletchers I'd be out but as a portfolio stock at 5% and on a longer term basis I have some confidence in the management so will ride out the storm.
I've always acknowledged horticulture as risky.

It's been known for a little while and both SEK and Zespri have made noises about it recently. The industry is going through a tough year with the quality issues and the huge limitations on labour. It will be interesting to see if the lack of access to reliable labour is in any way contributing to the quality issues ! So far I don;t think the industry believes that is the case.
But as you say, horticulture is always a risky business/investment and have the good, average and bad years. SEK is a very well managed business and while this year is a big disappointment, the long term strategy stays intact.

Discl: Halved my holding in the last couple of weeks. Will hold the rest long term.

[Sideshow Bob]

Seeka Announces Result for the Six Months to 30 June 2022 - NZX, New Zealand’s Exchange

Listed New Zealand produce company Seeka, reports its unaudited interim results for the six months ended 30 June 2022.

- $49.4m EBITDA – up 5.3% on six months to June 2021, (previous corresponding period (pcp))
- $21.5m NPAT – up 4.3% on pcp

Seeka has announced its results with a backdrop of Covid-19, adverse weather events, extreme labour shortages, machine commissioning delays, shipping disruption, lower fruit yields and poor quality. It has been a tough six months and the company has hunkered down, toughed it out and focussed on the immediate job of optimising its operations and results in a volatile environment with significant inflationary pressure and geopolitical events affecting key markets.

The company has focussed on core business having completed the acquisition and integration of OPAC, Orangewood and NZ Fruits in the last twelve months.

While revenue was up by 10% to $247.3m, earnings were impacted by increased costs and lower than expected fruit volumes. Labour was extremely tight through key main harvest periods with Seeka having to innovate to maintain operations. Loyal personnel were redeployed to "play out of position" at peak stress load to ensure the continuity of operations.
Fruit volumes were lower than expected reflecting a late 2021 storm in the Ōpōtiki region along with a seasonal reduction in yields across all catchments. In addition, the Gisborne region was later than normal in maturing and then was hit with persistent rain events.

Fruit quality in 2022 is unseasonably poor and this has created industry-wide issues.

The new highly-automated MAF Roda packing machine was commissioned later than expected adding to capacity challenges. The new machine brings together the latest automation as previously trialled by the company. The KKP machine alongside other automation investments and Seeka’s operations in Gisborne and Oakside provide the capacity to handle the expected 2023 crop volumes.

In June Seeka delivered its first sustainability report including three years of verified carbon footprint calculations. Seeka is committed to reducing its carbon footprint by 30% by 2030, 50% by 2030 and to be net carbon neutral by 2050.
Seeka reminds the market that it operates a seasonal business in the primary industry where the bulk of activities occur in the first six months of the year.

Dividend
The Board has determined that no dividend is payable at this time with the dividend to be reconsidered later in the year.

Full year operational guidance
Seeka’s full year outlook is dynamic, with a challenging second six months forecast. Full year net profit before tax is forecast to be between $9.0m and $11.0m.
The full text of the announcement is attached along with the unaudited six month financial statements to 30 June 2022.
ENDS