Kiwifruit export company Seeka reports a big financial loss due to bad weather

The kiwifruit exporter Seeka has reported a $14.5 million 2023 net loss after tax, down from a profit of $6.5 million the preceding year. 

The company is blaming a warm, wet winter, cyclones and hailstorms, which helped bring down yields to 29.8 million trays of class 1 kiwifruit, compared with 42 million in 2022.

Revenue for the 12 months ended 31 December was $300.9 million, down from $348.4 million in 2022.

There was a $19.6 million drop in gross profit, $3.8 million of non-cash impairments and revaluations, and a $5.4 million increase in finance expenses reflecting higher borrowings and higher interest rates.

The news led the company to suspend dividends and reduce capital expenditure.

It also aims to save $3 million a year with a captive insurance scheme registered in the Cook Islands, which will access world insurance markets directly for its corporate parent. 

In its annual report, the company gave details of its weather woes, including an unseasonably warm winter, which hampered spring budding, a heavy frost in October, hail in the Bay of Plenty and heavy rain in December.

Cyclones Hale and Gabrielle caused severe damage in the Hawke’s Bay and Tairāwhiti regions, and all these events lowered crop volumes and yields.

They also decreased packhouse efficiency, by slowing machines and reducing margins as additional grading staff were employed to remove damaged fruit.

SunGold kiwifruit were so badly affected some had to be withdrawn from export markets because of lower quality.

Despite these woes, the company says it is focused on restoring profitability in 2024 and reducing debt, helped by investments in automation. 

It is forecasting volumes to rebound in 2024.