Wednesday, 13 September 2023 11:25

Scales keeps loss in balance

Written by  Staff Reporters
Scales Corp managing director Andy Borland. Scales Corp managing director Andy Borland.

Scales Corp has recorded a 43.5% fall in underlying net profit after tax (NPAT) for the six months ending June 30.

This saw the owner of Mr Apple’s profit plunge from $25.6 million in the first half of last year to $14.5m in 2023. This also saw a corresponding drop in underlying earnings before interest, tax, depreciation and amortisation (Ebitda) of 25.1% - from $55.4m to $41.5m.

Despite the big profit drop, the company has stuck to its earlier guidance of underlying NPAT to shareholders of $14m to $19m and say it expects horticulture to “return to more normal performance” next year.

Mr Apple’s total own-grown export volumes are forecast to be 2.7 million twenty-foot container equivalents (TCEs), down from 3.3m TCEs in 2022. The company also noted that Mr Apple had 26% of its crop left to be sold, compared to 40% at the same time last year.

Scales managing director Andy Borland says Cyclone Gabrielle had reduced its apple crop, but the company had still seen strengthened demand for air freight, along with new customers.

“Scales delivered a resilient result in what was an extremely difficult 6-month period for the Horticulture division.”

Borland added that in the wake of Cyclone Gabrielle “extensive orchard remediation has taken place with approximately 165 hectares of damaged orchards recovered from silt, debris and slash”.

He says an outstanding effort by the company’s horticulture team has resulted in around 50% of recovered blocks being re-seeded, with a target to complete the re-seeding by the end of August.

Borland says Mr Apple had experienced “encouraging” growth in its premium varieties of Dazzle and Posy, especially in China.

He conceded that it had been a “extremely difficult growing and postharvest period for horticulture”, for the wider Hawke’s Bay produce industry, which resulted in lower volumes.

“However, higher in-market apple prices have helped to compensate for the lower volumes.”

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