You forgot to mention the four horse riders of the apocalypse :p ;
But lets face it - pessimists are apparently as often right as optimists ... however - optimists do live longer - which puts us into the majority :) ;
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Optimists live a life of constant disappointment, while pessimists experience many pleasant surprises.
I'm pleased for that very informative advice BP .. very comforting :)
I hear that there could be a vacancy for new PM coming up needing a fill in at short notice - interested ? ;)
We might have to wait until the last remaining dummy gets spat out in the Head Boy's crib ..
dire news ? but predicted by bull
Kiwifruit growers advised to talk to bank as returns drop and 2023 harvest expected to shrink
https://www.nzherald.co.nz/nz/kiwifr...LEHNJIRQLA54Y/
Green (HW) crop down significantly this year due to the frost.
Labour and RSE worker numbers seem to be good so will be a battle of efficiency for the pack houses. Overall won’t be a very profitable year.
Disc. I’m a middle manager in a Te Puke site at Seeka’s competitor
Yes correct fruit size will be big because of all the water but orchards will struggle to get the dry matter in without sun.
It will be similar to 2021 season where orchards couldn’t pick due to not enough sugar content but fruit was going soft/rotting on the vine.
The gold fruit looks ok because if you’ve got the $ to grow that you’ve likely got frost protection in place, it’s the HW crop that will struggle the most.
Lots of pack houses bulking up with automation and new cool stores which won’t be needed this year so far less income, but no less expenses (other than direct labour costs). Will be a good time to buy in march next year for Seeka once poor full year results come out. With the sector growth I reckon frosts or catastrophe aside 2024 will be the year to buy into Seeka
Looks like some kiwiifruit orchards were wiped out in the BOP , from what i saw on the news last night
Zespri running a meeting for growers
https://www.usx.co.nz/uploads/paperc...pdf?1674792070
Michael Franks on TV this morning talking about the orchards. Quite a few development (new) orchards destroyed and established ones damaged.
Also mentioned that a bridge has been washed away that is the only suitable access for some orchards which they would be picking from in 60 days.
They are hoping that something will be put in place by then.
It all sounded rather dire.
growers up in arms
Kiwifruit growers demand explanation over lack of pay
Chief executive Colin Bond said fruit loss for last season's fruit is now at 20 percent, up from the 7 percent previously forecast, an increase of 186 percent.
"Repacking is also up 300 percent - as are quality claims - on 2022, furthermore, our important Japan market has been undersupplied by more than a million trays and has experienced poorer fruit quality than forecast. The situation is unacceptable."
Bond said growers are suffering heavily, and the latest blow is untenable.
https://www.rnz.co.nz/news/country/4...er-lack-of-pay
Interesting - world has an undersupply of good quality Kiwi fruit ... and bull thinks this means that Kiwi producers will be hammered down.
Did you short international wheat producers at the time the Russians stole the stuff from the Ukraine. Did you?
Wheat supply suffered and guess what - wheat prices went up!
As I see it, there are two options for our Kiwifruit industry:
1) the world stops eating Kiwi fruit and our farmers can turn what is left into juice (unlikely) or
2) prices are going up and we better invest in the production of still more quality fruit :t_up:
I'd assume that our farmers and Seeka are reasonably well equipped to help with this good cause ...
But sure - if everything looks like an unsolvable problem for you, than the only tool you need is a sledge hammer :p ;
actually looks this season going to go down in the history books?? as maybe the worst ever ( except maybe psa ) and with no summer ( sun ) yet looks like maybe a very large amount of fruit wont be export quality im guessing so in answer to your question i guess japan may continue to be under supplied.
As for wheat it trades at price which were before russian invasion
yes maybe the crop will mainly go to juice or rot ?
anyway cant do much about the weather only pray next yr crop doe's not have issues like this yr
anyway on seeka im still sticking to another downgrade to come with no div
sounds baad ... washed away crops ?
Cyclone Gabrielle: Under-pressure kiwifruit export industry counting the costs
https://www.nzherald.co.nz/business/...GL5ZDA2HNGSII/
Kiwifruit orchardists in Te Puke could lose millions if truck access isn’t restored to their road before harvesting begins.
https://www.nzherald.co.nz/nz/stress...KZU2Z5KEOONTM/
2022 Kiwifruit industry regional contribution:
- Northland: $98m
- Auckland: $92m
- Katikati: $283
- Opotiki: $208m
- Tauranga: $276m
- Te Puke: $1070m
- Waihi: $33m
- Whakatane: $122m
- Waikato: $75m
- Poverty Bay: $89m
- Hawkes Bay: $39m
- Lower North Island: $5m
- South Island: $27m
https://www.nzherald.co.nz/nz/new-ze...PQ422XGQ3JKGM/
yup, nearly all production is in areas recently ravaged by storms.
that Jan rally looked promising but has been eroded completely.
hard to see good times for a while
'
I woke up this morning thinking why have I not sold my wife's SEK holding after selling mine months ago
Well at the end of the day, the wife no longer holds any SEK shares,however she is now the proud owner of some KMD shares.
I expect KMD will be paying increasing divies which will keep her happy..
There have been reports of hail events in the Bay of Plenty this evening.
Seeka and it's supplying growers can't catch a break.
... actually, the update so far does not sound too bad:
https://announcements.nzx.com/detail/406893
Quote:
Seeka's core Bay of Plenty kiwifruit growing region was spared the worst of
the weather and was not materially impacted by the event.
However, the Hawke's Bay, Gisborne, Coromandel and Kerikeri regions had
varying degrees of impact, with Hawke's Bay being worst hit. Approximately 5%
of Seeka's kiwifruit supply is grown in the Hawke's Bay region. Seeka will
continue to assess the impact of the cyclone and will update the market if it
identifies a material loss.
Seeka has made an initial assessment of its major assets and has not
identified any significant damage.
Harvest 2023 kiwifruit volumes are expected to be lower than the 2022 harvest
year due to an early season frost, variable bud break and now this cyclone.
Our response to this circumstance includes a reduction to the 2023 capital
expenditure programme and a focus on reducing costs in line with the lower
crop expectation.
I'm surprised that Northland is only $98M with the amount of Kiwifruit that's been planted around Kerikeri in the last few years. There are competing packhouses other than Seeka so perhaps they don't dominate as much as I would have thought. $2Bln collectively in the BOP!
A bit of relief for the growers. https://www.1news.co.nz/2023/02/22/f...tart-recovery/
Zespri's update on Gabrielle
https://www.usx.co.nz/uploads/paperc...pdf?1677034075
https://www.nzx.com/announcements/407187
Listed New Zealand produce handler Seeka Limited, with operations in New Zealand and Australia, has today reported its audited results for the year ended 31 December 2022.
$348 million Revenue — up 13% on FY21's $310m
$46.1 million EBITDA — down 19% on FY21's $56.8m (which included $7.6m Psa claim settlement)
$6.5 million Net Profit After Tax — down 56% on FY21's $14.9m
"Seeka and its supplying growers experienced a very difficult year with Covid-19, extreme labour shortages, shipping disruptions, lower kiwifruit yields and poor fruit quality all impacting returns," says Seeka chief executive Michael Franks.
"Harvest 2022 kiwifruit yields were down across the industry, impacting revenues from Seeka's core post harvest business. Kiwifruit storage performance, both onshore and offshore, further impacted returns to Seeka's orchard operations.
"Despite the challenging season, Seeka achieved an increase in revenues to $348 million as we attracted new growers to our business. Packing operations, however, peaked during the Omicron wave and the industry was severely short staffed. Higher labour costs and lower yields impacted margins and contributed to a drop in EBITDA to $46 million and a net profit after tax of $6.5 million.
"Since the harvest, Seeka has fully reviewed its supply chain operations from the orchard to loadout, and is focussed on achieving excellence in fruit handling in 2023. We are anticipating an improved labour supply with a large increase in RSE workers from the Pacific and Malaysia, and a normalisation of travel.
"The completion of a highly-automated packline in the Bay of Plenty, and automation projects at Gisborne and at our largest site near Te Puke will lift post harvest capacity, improve fruit handling and significantly reduce the demand for packhouse labour.
"Since Cyclone Gabrielle we have been inspecting our post harvest sites and supplying orchards to assess the potential impact on harvest 2023. While we did not see any significant damage to our post harvest facilities, we anticipate that the full impact on the crops will remain unknown until the fruit is harvested.
"Seeka's core Bay of Plenty kiwifruit growing region was spared the worst of the weather and was not materially impacted. The Hawke’s Bay, Gisborne, Coromandel and Kerikeri regions had varying degrees of impact, with Hawke’s Bay being worst hit. Approximately 5% of Seeka's kiwifruit supply is grown in the Hawke’s Bay region. We will continue to assess the situation and will update the market if Seeka identifies a material loss.
"Harvest 2023 kiwifruit volumes are expected to be lower than 2022 due to an early season frost, variable bud break and the cyclone. Seeka's response includes a reduction to the 2023 capital expenditure programme and reducing costs in line with the lower crop expectation.
"As Seeka focuses on delivering an excellent service, we continue to implement a range of decarbonisation initiatives that support and health and wellbeing of our communities. Seeka has set a target to become net zero carbon by 2050, and we are installing solar panels on our post harvest facilities and rolling out regenerative horticulture practices. This includes operating our own commercial worm farm that recovers a nutrient-rich soil conditioner from organic packhouse waste."
Dividend
"In this challenging environment the Board has determined that no dividend is payable as Seeka focuses on prudent financial ratios," says Franks.
Great to see still in the black, but no surprises that divvy has been canned.
commentary pretty much suggest's the next yr results will be impacted by ongoing issues from the frost and cyclone.
so another yr of huge uncertainty likely.
no div is good management with an uncertain yr ahead
pretty massive drop
Kiwifruit exporter Zespri warned its profit may fall as much as 40% as it struggles with fruit quality
https://www.stuff.co.nz/business/131...-listing-plans
zespri planning to list nzx later this yr
NZ industry not the only ones having issues:
https://www.foodnavigator-asia.com/A...5&bid=65446158
Add to that Italy/France. Low production due to extreme heat and drought.
Chile. Harvest coming up will be lowest in 10 years due to frosts.
Thanks for sharing.
Lots of red flags in there:
- China moving towards increased domestic food supply
- Government financial support for China's Kiwifruit industry
- Chinese companies developing their own varieties and IP
What's the bet NZ trained some of their scientists in our education facilities?
Red flags?
- China moving towards increased domestic food supply
This is a good thing, and should be fully supported by a anti globalist and populist like you. But apart from that, its good as well from an ecological and food security related perspective - less transport emissions and more diversity.
- Government financial support for China's Kiwifruit industry
Well, yes - most governments think it prudent to support their agriculture in one way or another. Just look at Europe or the States. How do you see our governments support for agricultural research?
- Chinese companies developing their own varieties and IP
Good on them. Competition is great, will increase diversity and competition and improve life for the consumer.
- What's the bet NZ trained some of their scientists in our education facilities?
So what? This is the way humanity is moving forward. Europeans learned from Chinese and Arabs most of their early medical knowledge. Most of our food staples come from the Americas ... populated at that time by people coming from Asia.
Isn't it great if we give some of that knowledge back ... and even to get them to pay for their education here?
Zespri has offered some pretty good strategies to be involved in the China growth and the European growth.
But under regulation they require the growers to vote on these strategies with 75 percent support required. Everything Zespri ever tries to do gets voted down because only 48 percent of the growers currently hold shares.
It becomes very frustrating for Zespri and the younger generations of Kiwifruit growers when progression is road blocked.
Red flags for Seeka and the NZ kiwifruit industry.
Anti-globalist? haha I am very pro free trade and the free movement of people and information.
The problem is China does not practice any of that and prefers to cheat, steal and lie. As soon as their kiwifruit industry is up to volume watch them pull more nonsense health scares on NZ kiwifruit to shift demand to local fruit like they did with the far superior Taiwanese pineapples.
China has already been caught stealing and growing NZ sungold kiwifruit and since there is no rule of law told NZ to stick it despite our free trade agreement.
From the original article looks like the NZ industry might be saved a bit by climate change. One can hope that burning all that coal even at the expense of idling green alternatives, deforesting the world and concreting everywhere to the point you can't see across the road due to the pollution backfires on the CCP.
Zespri sent out a grower update yesterday with an early forecast for this season just underway.
The forecast tray numbers are very sobering. They have forecast just over 7,000 trays per ha average for green and mid 11,000 trays per ha for gold.
The packout rates so far have also been below average with skin rub from wind being the main reject.
The cumulative effects (costs and lost production) of the extreme weather events (frost, rain, wind) is starting to become reality.
Grasping at positives, it will be a short selling and storage year which should mean less offshore fruit losses at market. And the harvest and packing should be a cake walk weather permitting.
Seeka, Eastpack etc have been working hard with the growers to control the controllables.
However, it's the outright volume of tray numbers that count for economies of scale to make money in this game.
Fingers crossed that normal weather patterns resume next season.
Kiwifruit orchard owners struggling to sell
Kiwifruit orchard prices have plummeted 30%, with sales stalling in the prime growing region of Bay of Plenty
https://www.stuff.co.nz/business/far...ggling-to-sell
The Green kiwifruit is a low value product. It's not even a viable business in the majority of cases if you are being honest about costs. The value of Green orchards are based on the value of a fully producing gold/red less conversion/license costs.
Zespri having to sell traditional Green fruit erodes the value that goes back to shareholders.
A new variety higher producing Green that is licensed to Zespri is not too far away from trials that will help solve the Green problem.
It's a great investment at these prices and I would not read too much into a real estate agents take on future business returns.
Nothing unexpected, but "ouch" all the same
SEK
19/04/2023 16:01
MKTUPDTE
PRICE SENSITIVE
REL: 1601 HRS Seeka Limited
MKTUPDTE: SEK: Seeka advises market of lower than expected crop volumes
Seeka Limited [NZX:SEK] advises that the early season kiwifruit volumes
packed by the company are well down on estimate reflecting climatic events
including an atypically mild winter followed by a severe late frost, cyclone
and more recently hail. Yields are well down on expectation.
Overall, the company estimates that total volumes could be down by 20% on the
previous year and may result in a forecast operating loss for the current
year. The company has proactively reduced costs, slowed its capital
expenditure programme and continued with its asset reviews.
Seeka advises it is too early to accurately estimate full year guidance and
will update the market on earnings when there is greater certainty of the
current year's financial outlook. Once the harvest is complete, the market
will be updated.
Release ends.
Not as bad as could be? Or a lot worse than expected?
Nobody will be going to ASM tomorrow after that announcement.
Add a loss making F23 year on and this chart looks really sad
The kiwifruit industry has never been in such good shape with regard to capital invested in new technologies, graders, coolstores etc. Everyone has been caught out firstly from the covid hangover followed by an extraordinary series of mother nature's furry.
Last week's hail events were just heart breaking.
The vines are in the ground and the numbers will be there once mother nature returns to some kind of normality.
If this happens next season then the post harvest operators cashflows will be very impressive.
In the meantime, may the sun shine for the next 6 weeks to enable an orderly harvest and efficient packing.
Well, it appears the best idea for you might be to keep all your money in cash and wait for inflation to reset it ;) ; No money, no worries - isn't that, what they say :p ;
Everybody else might remember that people so far always found a way to recover after tough times ... and if things recover then it is better to own the company rather than trying to buy it when everybody else tries to do that as well ...
Their ASM preso
http://nzx-prod-s7fsd7f98s.s3-websit...222/392938.pdf
Did sit through it.
Chair sounded somewhat sober, CEO added a bit of optimism. Clearly - they had a couple of terrible years (for reasons they couldn't control), but it sounds as well they are well prepared for the future. Better processes, significant investment into packing machines and geographic (Australian share growing) as well as product diversification (new fruit sorts).
Unless people will stop eating fresh fruit - this is a company delivering something people want and need, and it is currently available at bargain prices. Deep value game? Roll on 2024 ...
Discl: holding :) ;
Glad Chair was somewhat sober BP
Wouldn’t want a Chair showing signs of too much kiwifruit liquer would we
see they had to get relief on there bank convenents :scared: should do a cap raise as they say they want to reduce debt ( guess the bank told them too ? ) provide more liquidity to shares as well
They said at ASM that they discussed a cap raise the day before but because of current share price they wouldn’t be doing one
The ironic thing is, the changing of the well worn word 'chairman' to 'chair' to reflect 'sexual equality' is a crock anyway.
The 'man' bit of chair'man' never referred to a man in the first place. It is derived from the latin for 'hand'. In french (a latin family language) the word for hand is 'main', which when it found its way into English in 'chairman' lost the 'i'. So what 'chairman' actually means is someone who leads a board of people 'with a guiding hand', with no implied sexual connotations at all. Thus describing a woman who heads a board as a 'chairman' is the perfectly correct English expression to use. It is the thing she is sitting on that is the 'chair'. To describe a person as a 'chair' is a perversion of the English language.
SNOOPY
Good post Snoops …..suppose a Chairperson then is even worse than using Chair
Smallest green kiwifruit crop in 20 years means some growers won't make money
https://www.stuff.co.nz/business/far...ont-make-money
Green Kiwifruit are rarely profitable.
Anyway - good to see currently Kiwifruit specials in the shops. Our growers love to milk consumers when times are good for them, but this means they have no large home base.
The result is they now need to discount even a smaller harvest in the supermarkets.
My wife's grandma (herself a successful farmer) used to say "only dumb farmers don't look after their own people". But what would she know?
Confirmation in this article From Zespri and Eastpac that volumes are down 20% in line with Seeka's forecast.
Bad 2023 kiwifruit harvest sees some growers visiting bank manager to stay afloat
If a grower has an unhappy bank manager, selling some Seeka shares must seem a good option. Plenty of shares were issued to growers in part payment for the last few years acquisitions.
no end in sight to the stock down trend
:scared: shocker
https://www.nzx.com/announcements/413419
:scared:
half there debt due for renewal jan 24 only 3 mil in bank
cash issue time ?
No worries
El Nino is coming back
"It appears that almost every forecaster around the globe is predicting we will be going into the El Niño phase later this year."
https://www.interest.co.nz/rural-new...fford-assesses
That is a decline of 30%, big change from the 20% forecast which is also the industry average. Seeka obviously more exposed to hard hit regions.Quote:
Seeka has completed its New Zealand kiwifruit harvest packing a total of 29.8m class 1 trays, compared to 42.4m in the previous corresponding period.
...
Seeka’s regional market share is comparable between years
That is a decline of 30%, big drop from the 20% forecast which is what Eastpac and Trevelyan’s Pack & Cool suffered. Seeka obviously more exposed to hard hit regions.Quote:
Seeka has completed its New Zealand kiwifruit harvest packing a total of 29.8m class 1 trays, compared to 42.4m in the previous corresponding period.
...
Seeka’s regional market share is comparable between years
interesting read in announcement by PLP in regard to there kiwifriut orchard
https://www.nzx.com/announcements/413618
A report has been received recently on the Northland based kiwifruit orchard held by the Private Land and Property Portfolio (the wholesale fund into which the PLP invests). The report provided an independent assessment on the orchard including the maturity of the vines. Their assessment is that due to the adverse weather conditions earlier in the year (which had an impact on the management of the orchard), it is unlikely to reach its full productive capacity until later than originally expected.
how many orchard's in seeka portfolio similar ?
Eastpack packed 33.5m trays v 50 m if it was going to be a normalized year. Forecast loss before tax of 2m to 4m.
The Eastpack business model less complex than Seeka, and has invested heavily in modernization in recent years.
The Seeka business modernization is well behind in this regard.
Next seasons volumes should ensure reasonable profits. However, Seeka really needs to refresh and simplify its business plan to make the most of future opportunities.
eastpack notes issue a while back for capital raising and investing in upgrades to handle increasing volumes of kiwifruit was not well supported they even had too attempt to fill the shortfall by going back too everyone asking again if they were sure they didnt want to invest. So maybe not in full agreement about eastpk better positioned than seeka probably just similar positioned
anyway after the losses this yr and the not so good capital raising how much off the money raised will end up used as working capital vrs investment ? a issue i raised earlier on the thread in regards to the cap raising
Seeka and Eastpack are in different cycles with their modernization. You can't compare the funding models 100 percent because Eastpack is totally grower owned. So Eastpack is forced look at other funding alternatives.
Seeka got caught out because they purchased assets at the top of the investment cycle when money was cheap. The assets they purchased were not what they thought they were. This lead to a record fruit loss for their growers the previous season. Then we went into a low fruit volume season.
The hangovers are significant. Losses on the leased orchards will take time to fillter through from a cashflow perspective as a large chunk of the losses are sitting on their books with the growers.
To hold onto their grower base Seeka offered discounted medium term fixed price packing contracts. That's right, fixed.
Seeka is cutting staff, restructuring internally, and cutting costs.
With fruit volume increases next season the cashflows should be impressive. But the unknown question is to what extent the Seeka overheads are excessive.
The question. What would I do. I would divest all not performing assets and increase the capital expenditure significantly into IT and robotics. Not cut capital expenditure as Seeka has done.
Disc. I hold Eastpack and Seeka shares.
was the person who wrote the lease agreement a builder lol
yea i can see how the profit sharing costs will come thru over time
agree some of the returns on assets are not very good but i would cut costs first like they are doing then re- access non performing assets or look at the people managing them to see if there fit for purpose and the reason for non - purformance then get back on the job of cap investment
Seeka Completes Banking Refinancing
Seeka has extended 66% of the facilities to 31 January 2025 and 34% to 31 January 2026, as well as obtaining a waiver for the net leverage ratio and interest cover ratio banking covenants for the 30 June 2023 and 31 December 2023 test periods. The 30 June 2024 and 31 December 2024 banking covenants have been set on a “step down” basis to enable Seeka to reach its long-term covenants of 3.25x for the net leverage ratio and 2.00x for the interest cover ratio. Seeka remains firmly committed to reducing debt and building headroom into its banking covenants.
https://www.nzx.com/announcements/413976
So im presuming no dividend's for quite a while perhaps even none next yr based on the loss forecast second half yr and the need to get debt down as per banking arrangement
You have to love the banks. From the glass towers they have come up with 'sustainability' lending.
Maybe Seeka and the kiwifruit growers should be allowed to claim carbon credits for all of those Kiwifruit tree/vines planted.
"Under the current regulations, sadly you cannot register orchard species, vines and crops for carbon credits. This puts all kinds of delicious trees out of the running, including kiwifruit, olives and avocados. Tip: Most trees that grow to 5m are eligible, provided they're woody."
https://www.carboncrop.nz/post/is-my...#39;re%20woody.
Gold kiwifruit growers lose fight to exclude lucrative licences from property valuations
https://www.stuff.co.nz/business/far...rty-valuations
https://www.rnz.co.nz/news/country/4...rowers-worried
“She said last year the region's kiwifruit had a poor flowering because of the warm temperatures, and this year the lack of chilling had been even worse.”
I wonder how much cold is needed ? Down to 4C this morning, same for a few days. Northland.
Can anyone report on the Bay of Plenty ?
Worrying for the industry if this can’t be resolved.