Thanks sideshow. Did they state if they can get a crop off these blocks?..
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No - this was off the results presentation 23/2/23, so a month ago now. I would think those "extensively damaged" would be wiped out for crops.
Page 32 - http://nzx-prod-s7fsd7f98s.s3-websit...177/389221.pdf
Seems like the crops will be wiped for the 300 hectares affected. Likely to have to replant as well.
Some good questions which werent answered on the earnings call
- will you just drop the leases on the impacted orchards (didnt know yet)
- are the trees ruined (didnt know)
The bulk of the earnings of SCL is mostly down to the petfood/protein business, with the apples being something with potential post covid upside (once freight, energy and labor costs normalise). I think the big question isnt on the cyclone or the apples, its how long can the excess profits of the petfood/proteins business be maintained...... I dont expect ot be able to answer this in any way other than the CEO said they expect profts to be same in 2023 as 2022 and they are expanding....
I think Im a buyer for more... will wait till the knife stops falling for a bit...
Some of the future/impact of Gabrielle and the affected orchards will take some time to work through. But undoubtedly a lag for these orchards to be reproductive again. Expect some sort of update once this is known.
Petfood - It doesn't really split out where they make their money. Seems like Shelby has been a good buy, and must be responsible for a good part of this? JV with Alliance - although surely other companies can't like supplying Meateor and into a 50% shareholders that they are competing in the field with?? Understand petfood markets are taking a breather at the moment - economic issues, inflation, consumers trading down etc.
But they have got some good initiatives going - building a plant in Australia and "active discussions to build a presence in the European market". There is still plenty of investment going into the pet sector worldwide - and I think raw material supply will be crucial in the future.
Can't also under-estimate the impact of the lower dollar.
Logistics makes a solid contribution. Expect to continue on the back of higher sea/air rates. Although possibly shipping less of their own product.
Still trading at a PE at a shade under 21.....;)
I would be interested to know the capital requirements for the replanting... Might soak up a lot of cash over the next year or so.
But yes seems like a short term setback for a company which is generally going the right way.
Director Nick Harris bought 50k shares at price 2.86 on March 23rd.
To me a key question is the risk of another Gabrielle before the stop banks etc are repaired/improved? No point replanting if the likelihood of reoccurring in say next 10 years before the stop banks are raised is more than 20%. Just chucking numbers around for comment?
$45m (300 hect * 150k) !
Anyway bought some more today.