Seeka returns to profitability after horror 2023

The listed company expects 2024 full year earnings to be between $27.5 million and $31.5 m. In 2023, Seeka posted a $21m loss and $6.5m profit in 2022.

In a release to the NZ Stock Exchange last week, Seeka chief executive Michael Franks says the increased earnings reflect a strong close-out to the year, through lower-than-expected overhead costs and higher than anticipated income in December.

"The market guidance is based on unaudited financial results and the audited financial statements are expected to be released late February," says Franks.

Seeka operates a fully integrated orchard-to-market service, delivering premium produce to retailers and wholesalers, both in New Zealand and overseas.

The company's New Zealand product lines include kiwifruit, kiwiberries and Hass avocadoes: in Australia it is the largest producer of Hayward kiwifruit and Nashi pears and produce a range of European pears and plums.

Like other NZ horticulture companies, Seeka endured a tough 2023 as a warm wet winter, cyclones and hail significantly impacted orchards.

Yields were down across the industry, with Seeka only handling 30 million trays of class 1 New Zealand kiwifruit in 2023, compared with 42 million in 2022.

While Seeka's operations performance between the orchard and point of sale was impressive, the large drop in kiwifruit volumes reduced Seeka's revenue for 2023 to $301 million, down from $348 million in 2022.

Seeka responded to the seasonal downturn by suspending dividends and reducing overheads. This included establishing a captive insurance structure to slow the impact of rising insurance costs. Having completed several post-harvest automation projects, Seeka also reduced its capital expenditure.

Last June, Seeka's bankers provided a new $201 million sustainability-linked loan facility that included covenant waivers that allow Seeka to focus on restoring profitability.