Thursday, 09 September 2021 09:25

Hort earnings tip Scales' half-year results

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

Scales Corporation, the owners of the country’s largest apple packing and marketing business, has reported an improved half year result.

For six months ending June 30, the company made a net profit of $33.3 million, up 15% on the previous year.

Despite challenges, Scale’s horticulture division delivered underlying gross earnings of $38m, $1m better than 2020.

Scales owns the Mr Apple business, New Zealand’s largest grower, packer and marketer of apples. It grows apples on more than 1,100 hectares of orchards in the Hawke’s Bay.

Mr Apple’s total halfyear export volumes are forecast to be 3.6 million tray carton equivalents (TCEs), a drop of 300,000 TCEs.

Scales managing director Andy Borland says the horticulture division delivered a very strong performance – despite being impacted by a shortage of skilled RSE workers together with ongoing disruptions in global markets and supply chains.

He says volumes were affected by inclement weather in the key growing season. However, higher pricing offset these lower volumes – as well as the increased labour and shipping costs that were incurred.

“We are cognisant of the need to focus on increasing labour cost and availability issues and, accordingly, are pleased to note that we have commenced a 10-year strategy to improve efficiency and returns through automation. The first step of this journey was the development of our new Whakatu coolstore, which has already delivered a number of efficiencies this year.”

Scales’ other business divisions include food ingredients and logistics.

Borland says the strategic value of Scales Logistics is significant.

“During a period of global supply chain issues, together with a domestic shortage of refrigerated containers, Scales Logistics ensured all its horticulture customers were able to ship their 2021 harvests. This expertise provides a significant strategic advantage to the group.”

Full-Year Guidance

The solid half-year results have helped Scales Corporation upgrade its full year net profit guidance to be between $32 million and $37 million.

Scales chair Tim Goodacre says the company still anticipates disruptions to domestic and international operations, including labour availability, global markets and supply chains due to the ripple effects of Covid-19.

“This can be evidenced by the current lockdown in New Zealand,” he says. “However, we believe our diversified focus will go some way to mitigate these issues.”

Goodacre adds that the company is aware that it cannot operate during lockdowns without its team, “and their health and safety will continue to be our foremost priority”.

More like this

Featured

Co-op boosts chilled exports to China

Alliance Group has secured greater access for chilled beef exports to China, following approval for two of its processing plants to supply the market.

Expo set to deliver in spades

The countdown is on to be one of the most anticipated events in the sheep and beef industry, the East Coast Farming Expo.

New Summerfruit NZ CEO

Dean Smith has been in the role of CEO of Summerfruit NZ for about four months, having succeeded Kate Hellstrom at the end of September.

FE survey underway

Beef + Lamb NZ wants farmers to complete a survey that will shed light on the financial toll of facial eczema (FE) at the farm level.

National

$8b export milestone

Horticulture Minister Nicola Grigg says she takes her hat off to all NZ growers for the hard yards they have…

Temptation Valley makes a splash

Later this month, Ardgour Valley Orchards apricots will burst onto the world stage and domestic supermarket shelves under the Temptation…

Helping develop, grow markets

While NZ Avocado is not directly involved in selling fruit, it does have a significant role in supporting exporters to…

Machinery & Products

Sorting unwashed potatoes made easy

Downs, a leader in potato reception, automated sorting, and storage, has introduced its new high-throughput optical sorter for unwashed potatoes…

Jumbo X saves time and money

A winner of a prestigious ‘Technical Innovations 2024’ award by FederUnacoma at the EIMA show in Italy, the Maschio Jumbo…

NH unveils specialty tractor

New Holland recently showcased its new-generation T4.120 F specialty tractor, giving New Zealand customers a closer look at the winner…

Combining track and tyre

While the last fifty years has seen massive evolution and development of the humble tractor tyre, the last two decades…

Croplands goes nuts with Nelson

Croplands and Nelson Manufacturing Company Inc, a California-based manufacturer of air-blast sprayers, has announced a new distribution partnership to deliver…

» Latest Print Issues Online

The Hound

Ruth reckons

OPINION: Ruth Richardson, architect of the 1991 ‘Mother of all Budgets’ and the economic reforms dubbed ‘Ruthanasia’, added her two…

Veg, no meat?

OPINION: Why do vegans and others opposed to eating meat try to convince others that a plant based diet is…

» eNewsletter

Subscribe to our weekly newsletter