A third season of COVID-19 harvest and supply chain disruptions, rising labor and input costs, and the impact of quality issues in some of the New Zealand Envy™ crops have resulted in T&G Global recording an after-tax loss of $0.9 million for the year ending 31 December 2022, compared to the prior year's $13.6 million profit.
While the total revenue for the year, $1.30 billion, was down $70 million compared to the previous year, operating profit increased by $3.50 million due primarily to improved performance of the high margin VentureFruit™ business and reduced operating losses in the International Trading business.
Summary:
- Revenue: $1.30 billion, down from $1.37 billion
- Operating profit: $20.4 million, up from $16.9 million
- Net (loss) / profit before tax: ($3.3 million), down from $9.8 million
- Net (loss) / profit after tax: ($0.9 million), down from $13.6 million
- Total equity: $580.2 million, up from $573.6 million
At a Group level, a strong start in the first half of the year was partly eroded by product disposals and softer prices linked to the Envy quality issue. Rapidly worsening economic conditions in the Northern Hemisphere, which affected consumer demand in the UK and Europe, also influenced the year-end result.
T&G Global Chief Executive Officer, Gareth Edgecombe, says the Company's 125th year in business would be marked as one of its most challenging.
"The significant progress we are making in strengthening our underlying business through growing, packing, marketing, and selling premium, high-quality fresh produce to Kiwis and consumers around the world is unfortunately not reflected in our financial results, given the challenges faced in 2022 with unfavorable growing conditions, rising costs and supply chain constraints," says Mr. Edgecombe.
The Envy quality issue arose mainly from heavy rains before and during the 2022 harvest. Supply chain disruptions then delayed the arrival of fruit into markets, especially in Asia. While the business moved quickly to withdraw fruit that was below consumers' expectations, the price of remaining inventories softened, and some disposals were required.
"We are confident that our response protected the value of the brand and customer and consumer confidence in it. We undertook a full analysis to understand the contributing factors and implement learnings should similar conditions occur in the future."
Apples operating profit decreased from $40.6 million in 2021 to $27.8 million in 2022, and the revenue decreased by $76.8 million to $774.6 million this year.
The total equity grew 1% to $580.2 million compared to the prior year's $573.6 million. This reflects capital investments to expand the Company's orchards in Hawke's Bay, along with the construction of the first phase of a highly automated packhouse at Whakatu, due to be completed in early 2023.
You can read the 2022 Annual Report here.
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