Seeka Announces Result for the Six Months to 30 June 2023
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at June 2023
Results for announcement to the market
Name of issuer Seeka Limited
Reporting Period 6 months to 30 June 2023
Previous Reporting Period 6 months to 30 June 2022
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$212,670 (14.0%)
Total Revenue $212,670 (14.0%)
Net profit/(loss) from
continuing operations
$10,474 (51.2%)
Total net profit/(loss) $10,474 (51.2%)
Interim/Final Dividend
Amount per Quoted Equity
Security
Nil dividend declared
Imputed amount per Quoted
Equity Security
Not Applicable
Record Date Not Applicable
Dividend Payment Date Not Applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$6.01 $6.07
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Net tangible asset per share is calculated by dividing the
Group’s net assets less goodwill by the total shares on issue at
the end of the period.
Authority for this announcement
Name of person
authorised
to make this announcement
Nicola Neilson
Contact person for this
announcement
Nicola Neilson
Contact phone number +64 21 841 606
Contact email address nicola.neilson@seeka.co.nz
Date of release through MAP
23 August 2023
Unaudited financial statements accompany this announcement.
---
1SEEKA LIMITED | ANNUAL REPORT 2021
JUNE 2023
INTERIM REPORT
1SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Contents
Welcome to our Interim Report where we detail our financial and operational
performance for the six months to 30 June 2023.
2 Chair and Chief Executive's report
5 Interim financial statements
6 Statement of profit or loss
7 Statement of comprehensive income
8 Statement of financial position
9 Statement of changes in equity
10 Statement of cash flows
11 Notes to the interim financial statements
28 Directory
Main contents
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED2
Chair and Chief Executive's report
New Zealand's kiwifruit industry had a very tough 2023 harvest with low volumes and
challenging weather. Seeka, as a large grower and operator, is not immune to these
challenges. Seeka’s revenue for the 6 months ended 30 June 2023 was $212.7 million,
down from $247.3 million in the previous corresponding period to June 2022 (pcp). From
this 14% drop in revenue, profit before tax was also lower at $13.6 million (pcp: $30.1m).
This financial result reflects lower kiwifruit volumes harvested by Seeka and the wider New
Zealand industry in 2023.
Despite challenging trading conditions, Seeka progressed its strategy. The company has focussed on
operational excellence and has delivered a timely harvest to growers, along with low fruit loss and quality
produce to the markets. New automation commissioned in 2023 delivered on expectations, which along
with operational changes has produced better outcomes for all stakeholders.
Seeka’s in-house teams have improved their reporting systems to our operational decision makers. New
picking processes, introduced to overcome industry quality issues in 2022, also worked well.
Operationally the business is set to handle the anticipated volume rebound in 2024.
Seeka has focussed on reducing costs, and all segments of the business were reviewed to create a
leaner organisation. The company remains focussed on removing inefficiencies in the supply chain, and
innovatively, Seeka has implemented a captive insurance structure which places more cover directly to the
international markets to help contain the ongoing increases in insurance costs.
The company has focussed on prudent debt management, slowing capital expenditure and reducing forward
capital expenditure to within depreciation levels. Seeka engaged with its banking syndicate and has their
continuing support, including their waiver of two banking covenants for the 2023 test period. The company
continues to review its asset mix and investigate opportunities to sell and lease back some facilities.
169.9
2 7.9
16.5
178.7
30.4
1 7. 4
224.5
46.9
30.824 7. 3
212.7
49.4
36.4
30.1
13.6
Group revenue
6 months to 30 June
NZD Millions
Group EBITDA
6 months to 30 June
NZD Millions
Group net profit before tax
6 months to 30 June
NZD Millions
201920202021202220232019202020212022202320192020202120222023
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3SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Challenging growing conditions
2023 was a difficult season across the horticultural sector. Kiwifruit growers faced many challenges in a
tight labour environment. Heavy rains and a warm winter contributed to an indifferent budbreak, particularly
in Northland and the Te Kaha regions. A heavy frost on 7 October 2022 impacted many orchards right
across our growing regions, with a number devastated. Continual rain through the Christmas period was
exacerbated by Cyclone Hale and Cyclone Gabrielle, which caused severe damage in the Hawke’s Bay and
Tairāwhiti Gisborne regions. Thankfully, all our people and growers were safe; quite remarkable given the
extent of the flooding and damage.
On 10 and 11 May, significant hail hit the Te Puke region, and while some orchards only experienced light
damage, others suffered total loss. This hail event further lowered crop volumes. Hail-damaged lines also
decrease packhouse efficiency and margins as additional grading staff are required to remove damaged fruit
as Seeka works to provide the best possible outcomes for impacted growers.
With its warm, moist growing conditions, harvest 2023 also produced SunGold kiwifruit with below
normal dry matter. This occurred in a year when Zespri had increased dry matter maturity thresholds as a
mechanism to improve the consumer taste experience. This convergence resulted in a significant volume of
quality SunGold kiwifruit not being packed for export. This further lowered returns to our orchard and post
harvest operations.
SeekaFresh, our wholesaling and produce distribution business, continues to rebuild after two years of
Covid-19 restrictions. The avocado programme, whilst challenging, delivered market-leading returns to our
growers. The kiwiberry programme had an excellent season and achieved record export returns.
Many of the issues faced in New Zealand were mirrored in Australia with hail and flooding in the
Shepparton region affecting 2023 crop volumes.
Operational excellence
Operationally, within a very challenging harvest, Seeka has delivered an excellent harvest for growers and
Zespri. The fruit Seeka delivered to the market in 2023 is excellent; our initiatives to deliver quality fruit and
performance were successful. Onshore fruit loss is extremely low and our current offshore fruit loss is also
low. The company remains obsessed with quality.
The new automated packing machine at KKP performed well and has delivered the anticipated throughput
and capacity gains. Automation upgrades at both Oakside and Seeka Gisborne have also enhanced capacity
and throughput.
Our mix of automated and manual packlines gives Seeka the flexibility to efficiently handle a harvest that
includes fruit from hail or water damaged orchards. Quality lines can be quickly and efficiently processed
on Seeka’s highly automated packlines, while crop from damaged orchards can be cared for with intensive
manual grading. This mix of packing technology allows Seeka to provide a timely harvest to supplying
growers.
While it is too early to make a reliable prediction on the 2024 crop, the current cold winter conditions are
favourable for kiwifruit growth and are in stark contrast to the previous year’s winter.
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED4
Finance renewal
Prudently, Seeka has suspended dividends and reduced capital expenditure to maintenance levels.
The company engaged with our banking syndicate early in the scheduled banking renewal process,
and they have supported Seeka to provide banking certainty with the syndicate waiving two of the
banking covenants for the current financial year and approving negotiated covenants for 2024. A
new Sustainability-Linked Loan was added to the suite of banking facilities which rewards Seeka
should it achieve set sustainability targets, with penalties if they are not met.
The company has also targeted operational and overhead cost reduction in the first six months of
2023, with these initiatives set to achieve forward savings of $3 million per annum.
Capacity
In recent years Seeka has made significant investments in capacity and automation at KKP, Oakside,
Seeka Gisborne and Transcool, which has lifted our New Zealand kiwifruit capacity to more than 50
million trays in a “normal” growing season. This investment means that Seeka can, and is, reducing
capital expenditure to within annual depreciation, with a focus on ensuring our assets are fully
maintained and Seeka’s people and stakeholders enjoy a safe environment. To further lift efficiency,
automation upgrades continue at Oakside and Transpack in preparation for harvest 2024.
Seeka continues to invest in quality accommodation for seasonal workers. New accommodation
facilities have been leased in the Te Puke region and Seeka has built a new accommodation facility at
Sharp Road Aongatete which it intends to sell and lease back.
Forward focus
Your company has been through an extended period of challenges with Covid-19 and weather events.
Seeka’s foundation business is kiwifruit, and the volumes to Seeka's New Zealand post harvest fell
29% in 2023 to 29.8 million class 1 trays, compared to 42.0 million in 2022.
The weather pattern has recently changed from La Niña to El Niño, and the current winter conditions
are cold and dry; a stark contrast to last year.
The challenges of quality have been managed and the 2023 selling season is going well.
Seeka has turned its attention to planning for a resurgence in kiwifruit volumes and a return to
profitability in 2024.
We thank our people, stakeholders and growers for their hard work and continuing support.
Fred Hutchings Michael Franks
Chair Chief executive
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5SEEKA LIMITED | INTERIM REPORT | JUNE 2023
6 Statement of profit or loss
7 Statement of comprehensive income
8 Statement of financial position
9 Statement of changes in equity
10 Statement of cash flows
11 Notes to the interim financial statements
Interim financial statements
Six months to June 2023
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED6
Statement of profit or loss
For the six months ended 30 June 2023
The accompanying notes form an integral part of these interim financial statements
New Zealand dollarsNotes
6 months to
June 2023
Unaudited
$000s
6 months to
June 2022
Unaudited
$000s
12 months to
December 2022
Audited
$000s
Revenue
212,670 247,345 348,387
Cost of sales
147,915 169,139 280,078
(Reduction) in fair value of biological assets - crop
7
( 16,329) ( 16,240) -
Gross profit
48,426 61,966 68,309
Other income / (expenses)
343 ( 8) 755
Share of profit of associates
- - 1,154
Other costs
12,344 12,598 24,139
Earnings (EBITDA)
1
36,425 49,360 46,079
Depreciation expense
5
7,695 8,794 16,055
Lease depreciation expense
8
5,250 4,824 9,516
Impairment of property, plant and equipment
5
547 111 144
Loss on revaluation of property, plant and equipment
5
959 - -
Impairment of biological assets
- - 191
Impairment of intangible assets
- - 681
Amortisation of intangible assets
6
180 235 406
Earnings (EBIT)
2
21,794 35,396 19,086
Interest expense
5,751 3,124 7,204
Lease interest expense
2,408 2,207 4,289
Net profit before tax
13,635 30,065 7,593
Income tax charge
2,430 7,110 1,624
Deferred tax charge / (benefit)
731 1,501 ( 535)
Total tax charge
3,161 8,611 1,089
Net profit attributable to equity holders
10,474 21,454 6,504
Earnings per share for profit attributable to the ordinary
equity holders of the Group during the year
Basic earnings per share
$0.25 $0.52$0.16
Diluted earnings per share
$0.25 $0.52$0.16
1. EBITDA, a non-GAAP measure, is earnings before interest, tax, depreciation, amortisation, impairments and revaluations, see note 1.
2. EBIT, a non-GAAP measure, is earnings before interest and tax.
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7SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Statement of comprehensive income
For the six months ended 30 June 2023
New Zealand dollars
6 months to
June 2023
Unaudited
$000s
6 months to
June 2022
Unaudited
$000s
12 months to
December 2022
Audited
$000s
Net profit for the period
10,474 21,454 6,504
Items that will not be reclassified to profit or loss - net of tax
(Loss) / gain on revaluation of land and buildings
( 9,014) - 9,736
(Loss) / gain on revaluation of water shares
( 99) 307 162
Total items that will not be reclassified to profit or loss
( 9,113) 307 9,898
Items that may be reclassified subsequently to profit or loss, net of tax
Movement in cash flow hedge reserve
( 151) 1,709 2,864
Movement in foreign currency translation reserve
( 4) ( 50) 47
Movement in foreign currency revaluation reserve
366 446 ( 92)
Total items that may be reclassified subsequently to profit or loss
211 2,105 2,819
Total comprehensive income for the period attributable to equity holders
1,572 23,866 19,221
The accompanying notes form an integral part of these interim financial statements
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Financial contents
INTERIM REPORT | JUNE 2023 | SEEKA LIMITED8
Statement of financial position
As at 30 June 2023
New Zealand dollarsNotes
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Equity
Share capital
162,807 162,767 162,746
Reserves
45,494 45,134 55,437
Retained earnings
64,275 67,710 52,760
Total equity
272,576 275,611 270,943
Current assets
Cash and cash equivalents
5,182 7,783 3,554
Trade and other receivables
9
94,304 106,770 33,147
Biological assets - crop
7
2,079 2,203 18,408
Inventories
10
14,684 17,953 11,900
Irrigation water rights
20 43 127
Assets classified as held for sale
4
3,096 4,754 6,293
Total current assets
119,365 139,506 73,429
Non current assets
Trade and other receivables
9
6,377 2,652 5,099
Property, plant and equipment
5
364,563 358,641 375,788
Intangible assets
6
26,805 30,983 26,934
Right-of-use lease assets
8
54,961 54,493 55,805
Investment in associates and joint arrangements
5,952 3,768 5,952
Derivative financial instruments
3,227 1,836 3,438
Investment in financial assets
1,424 2,485 1,424
Total non current assets
463,309 454,858 474,440
Total assets
582,674 594,364 547,869
Current liabilities
Tax liabilities
1,889 8,204 337
Trade and other payables
11
35,243 52,210 32,778
Lease liabilities
8
9,659 8,783 9,631
Interest bearing liabilities
12
53,721 30,548 22,870
Total current liabilities
100,512 99,745 65,616
Non current liabilities
Interest bearing liabilities
12
128,471 138,492 128,072
Lease liabilities
8
59,556 59,313 60,434
Deferred tax liabilities
21,559 21,203 22,804
Total non current liabilities
209,586 219,008 211,310
Total liabilities
310,098 318,753 276,926
Net assets
272,576 275,611 270,943
The accompanying notes form an integral part of these interim financial statements
On behalf of the Board.
F Hutchings A Waugh
Chair Director Dated: 23 August 2023
Financial contents
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9SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Statement of changes in equity
For the six months ended 30 June 2023
New Zealand dollarsNotes
Share
capital
$000s
Cash
flow hedge
reserve
$000s
Foreign
currency
revaluation
reserve
$000s
Foreign
currency
translation
reserve
$000s
Share
reserve
$000s
Water
share
revaluation
reserve
$000s
Land and
buildings
revaluation
reserve
$000s
Retained
earnings
$000s
Total
$000s
2022
Equity at 1 January 2022 (audited)
151,681 ( 388) 90 ( 208) 526 2,594 40,632 51,564 246,491
Net profit
- - - - - - - 21,454 21,454
Foreign exchange movement
- - 446 ( 50) ( 2) 2 - - 396
Other comprehensive income
- 1,709 - - - 307 - - 2,016
Total comprehensive income
- 1,709 446 ( 50) ( 2) 309 - 21,454 23,866
Transactions with owners
Shares issued
9,297 - - - - - - - 9,297
Employee share scheme receipts
815 - - - - - - - 815
Grower share scheme receipts
403 - - - - - - - 403
Movement in employee share
entitlement reserve
459 - - - ( 450) - - - 9
Movement in grower share
entitlement reserve
112 - - - ( 74) - - - 38
Dividends paid
13
- - - - - - - ( 5,308) ( 5,308)
Total transactions with owners
11,086 - - - ( 524) - - ( 5,308) 5,254
Equity at 30 June 2022 (unaudited)
162,767 1,321 536 ( 258) - 2,903 40,632 67,710 275,611
2023
Equity at 1 January 2023 (audited)
162,746 2,476 ( 2) ( 161) - 2,756 50,368 52,760 270,943
Net profit
- - - - - - - 10,474 10,474
Foreign exchange movement
- - 366 ( 4) - - - - 362
Other comprehensive income / (loss)
- ( 151) - - - ( 1,140) ( 9,014) 1,041 ( 9,264)
Total comprehensive income / (loss)
- ( 151) 366 ( 4) - ( 1,140) ( 9,014) 11,515 1,572
Transactions with owners
Employee share scheme receipts
61 - - - - - - - 61
Total transactions with owners
61 - - - - - - - 61
Equity at 30 June 2023 (unaudited)
162,807 2,325 364 ( 165) - 1,616 41,354 64,275 272,576
The accompanying notes form an integral part of these interim financial statements
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Financial contents
INTERIM REPORT | JUNE 2023 | SEEKA LIMITED10
Statement of cash flows
For the six months ended 30 June 2023
New Zealand dollarsNotes
6 months to
June 2023
Unaudited
$000s
6 months to
June 2022
Unaudited
$000s
12 months to
December 2022
Audited
$000s
Operating activities
Cash was provided from:
Receipts from customers
176,236 208,474 346,084
Interest and dividends received
35 9 95
Insurance proceeds
427 - -
Cash was disbursed to:
Payments to suppliers and employees
( 162,669) ( 177,217) ( 313,426)
Interest paid
( 7,177) ( 3,124) ( 7,204)
Lease interest paid
( 2,408) ( 2,207) ( 4,289)
Income taxes paid
37 ( 6,793) ( 9,132)
Net cash flows from operating activities
3
4,481 19,142 12,128
Investing activities
Cash was provided from:
Sale of property, plant and equipment
418 597 596
Cash acquired in acquisition of business
- 33 33
Distributions from investment in associates
- 190 518
Sale of investment in shares
- - 253
Proceeds from sale of assets classified as held for sale
4,890 - 527
Repayment of grower or grower entity advances
1,998 1,635 34,272
Cash was applied to:
Purchase of property, plant, equipment and intangibles
( 10,966) ( 22,921) ( 29,681)
Development of bearer plants
( 2,912) ( 2,094) ( 4,183)
Acquisition of business
- ( 8,853) ( 8,853)
Acquisition of associates
- ( 420) ( 1,358)
Advances to growers or grower entities
( 21,278) ( 34,801) ( 34,022)
Net cash flows (used in) investing activities
( 27,850) ( 66,634) ( 41,898)
Financing activities
Cash was provided from:
Proceeds of non-current bank borrowings
30,000 30,000 50,000
Proceeds of current bank borrowings
60,257 37,610 64,753
Proceeds from employee and grower loyalty share scheme
61 1,218 1,195
Cash was applied to:
Principal lease payments
( 5,677) ( 4,942) ( 9,231)
Repayment of non-current bank borrowings
( 18,000) ( 4,175) ( 34,175)
Repayment of current bank borrowings
( 41,505) ( 12,671) ( 47,216)
Payment of dividend to and behalf of shareholders
13
- ( 4,374) ( 4,374)
Net cash flows from financing activities
25,136 42,666 20,952
Net increase / (decrease) in cash and cash equivalents
1,767 ( 4,826) ( 8,818)
Effect of foreign exchange rates
( 139) 248 11
Opening cash and cash equivalents
3,554 12,361 12,361
Closing cash and cash equivalents
5,182 7,783 3,554
The accompanying notes form an integral part of these interim financial statements
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11SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Notes to the interim financial statements
For the six months ended 30 June 2023
This section contains the notes to the consolidated financial statements for Seeka Limited, its subsidiaries and associates.
To give stakeholders a clear insight into how Seeka organises its business, the note disclosures are grouped into five sections.
NoteDetailsPage
Basis of preparation 12
Accounting policies that apply to Seeka's full set of interim financial statements
Performance 14
Where Seeka generates its revenues and their associated operating costs
1. Segment information 14
2. Turnover 16
3. Reconciliation of net operating surplus after taxation with cash flows from operating activities 17
Assets 18
How Seeka allocates resources across its operations
4. Assets classified as held for sale 18
5. Property, plant and equipment 19
6. Intangible assets 20
7. Biological assets - crop 21
8. Right-of-use lease assets and lease liabilities 22
Working capital 23
How Seeka manages its operating cash flow
9. Trade and other receivables 23
10. Inventories 23
11. Trade and other payables 24
Interest bearing liabilities, dividends, share capital and fair value 25
How Seeka funds its operations, distributes dividends to shareholders, manages
share capital and determines the fair value of financial instruments
12. Interest bearing liabilities 25
13. Dividends 26
14. Share capital 26
15. Determination of fair values of financial assets and liabilities 26
16. Related party transactions 27
17. Capital commitments 27
18. Events occurring after balance date 27
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED12
Reporting entity and statutory base
The interim financial statements presented are those of the consolidated Seeka group. Seeka Limited is referred to as Seeka Limited or the
Company. The group is referred to as the Group, Seeka, or Seeka Group.
Seeka Limited is a profit-orientated company registered in New Zealand under the Companies Act 1993 and a Financial Markets Conduct (FMC)
Reporting Entity for the purposes of the FMC Act 2013. Seeka Limited is listed and its ordinary shares are quoted on the NZX main board equity
security market (NZX Main Board).
Nature of operations
Seeka is a produce business operating in New Zealand and Australia.
In New Zealand the Group provides orchard management, orchard leasing, post harvest and retail services to New Zealand’s kiwifruit, avocado,
citrus, berry, persimmon, and kiwiberry industries. Seeka manufactures and sells the Kiwi Crush and Kiwi Crushies product range along with
avocado oil. The Group also provides retail and ripening services for imported tropical produce, and operates a wholesale market.
In Australia, Seeka owns, leases and operates orchards and associated post harvest assets, making the Group the largest producer and supplier of
Australian kiwifruit and nashi pears, a major supplier of European pears, plus other fruits, including plums and jujube dates.
Statement of compliance and basis of preparation
Group consolidated interim financial statements for the half year reporting period ended 30 June 2023 have been prepared in accordance
with New Zealand Generally Accepted Accounting Principles (NZ GAAP) and comply with the New Zealand International Financial Reporting
Standards (NZ IFRS) and other reporting standards as applicable to profit-oriented entities. Specifically, Group interim financial statements have
been prepared in accordance with NZ IAS 34, Interim Financial Reporting. This consolidated interim financial information does not include all
of the information required for the full annual audited financial statements and should be read in conjunction with the annual audited financial
statements for the year ended 31 December 2022, which have been prepared in accordance with NZ IFRS.
The significant accounting policies applied in the preparation of the financial statements are set out below.
The financial statements were approved by the Board of Directors (the Board) on 23 August 2023. The Directors do not have the authority to
amend the financial statements after issue.
Summary of significant accounting policies
Other than detailed above, the accounting policies applied are consistent with those of the annual audited financial statements for the year ended
31 December 2022, as described in those annual financial statements.
Where a change in the presentational format of the financial statements has been made during the period, comparative figures have been
restated accordingly.
Going concern assumption
The financial statements have been prepared on a going concern basis.
The 2023 New Zealand kiwifruit harvest was impacted by a number of adverse weather events, including a severe frost on 7 October 2022,
cyclones in January and February 2023, and hail in May 2023. Similarly, Australia faced severe flooding and hail events during the same period.
These weather events have resulted in a significant reduction of kiwifruit volumes in New Zealand and Australia.
The Group has a forecast net loss before tax between $20m and $25m for the 12 months ending 31 December 2023. Seeka has undertaken cost
containment measures and is progressively reviewing and restructuring business units, as well as limiting capital expenditure.
The Group compares the carrying amount of net assets with the market capitalisation value at each balance date. The share price at 30 June 2023
was $2.61, equating to a market capitalisation of $109.59m. This market value excludes any control premium and may not reflect the value of
Group net assets. The carrying amount of Group net assets at 30 June 2023 was $272.58m ($6.49 net assets per share).
Seeka has engaged with its banking syndicate and has refinanced its banking facilities at 30 June 2023 into a Sustainability-Linked Loan facility of
NZD$201m. The facilities have extended maturity dates, with 61% extended to 31 January 2025 and the remainder extended to 31 January 2026.
As part of the refinancing, Seeka has obtained a waiver for the net leverage ratio and interest cover ratio for the 30 June 2023 and 31 December
2023 test periods, see note 12.
Seeka’s outlook is vulnerable to the weather during key growing periods. However, an anticipated El Ninò weather pattern provides a more
positive outlook. The longer term impacts of climate change are being considered and Seeka intends to mitigate these risks through regional
diversification, growing techniques, and taking an innovative approach to all parts of the supply chain.
The Group has performed impairment testing across all its operating CGUs. These tests are outlined in note 6.
The outlook for the Group and the kiwifruit industry is for increasing volumes, which is supported by the SunGold and Zespri RubyRed licences
that have been released by Zespri, and bought by growers to develop new kiwifruit orchards.
The Directors have considered the economic environment, the forward outlook for the kiwifruit industry, the results of the value in use
calculations, and the forecast covenant compliance to determine that the going concern assumption is able to be supported.
This section sets out the Group’s accounting policies that apply to the consolidated interim financial statements for the half
year reporting period ended 30 June 2023. Accounting policies which are limited to a specific note are described in that note.
Basis of preparation
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13SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Seasonal nature of Group operations
Seeka's core business is providing supply chain services to New Zealand and Australia's horticulture industries. A high proportion of
Group revenue is generated and cost of sales incurred in the autumn when produce is harvested and prepared for market. Correspondingly,
approximately 80% to 100% of Group gross profit is recorded in the interim report. Seasonal fluctuations impact the timing of gross profit,
particularly the amount and quality of kiwifruit inventory remaining in store at 30 June.
Goods and services tax (GST)
The statement of financial performance and statement of comprehensive income have been prepared so that all components are stated exclusive
of GST. All items in the statement of financial position are stated net of GST, with the exception of receivables and payables, which include GST
invoiced.
Impact of standards issued but not yet applied by the entity
There are no new standards, amendments or interpretations that have been issued and are effective that are expected to have a significant impact
on the Group.
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED14
Performance
1. Segment information
The Group’s operating segments are entities that engage in business activities that earn revenues, incur expenses and are reported in a manner
consistent with the internal reports provided to the chief decision makers, being the Directors, who regularly evaluate the allocation of resources
alongside operational outcomes, such as EBITDA and EBIT, and are responsible for setting strategic direction.
The Group has five operating segments:
–Four New Zealand segments express the range of complementary services delivered to New Zealand’s produce industries and the retail sector.
–A single Australian operating segment covers the integrated supply chain service for the Group’s Australian-grown fruit.
Direct segment revenues and operating costs are allocated to each segment. Administration costs, overheads, grower service costs and other
income from the sale of assets recorded in the statement of profit or loss are allocated to all other segments. Transactions between segments are
conducted at arm’s length and are eliminated on consolidation.
Segment information is prepared on the same basis as the annual audited financial statements for the year ended 31 December 2022.
New Zealand segments
Orchard operations
The Group provides on-orchard management services to orchard owners who produce kiwifruit, avocado and kiwiberry crops.
The Group produces kiwifruit, avocado, citrus and kiwiberry crops from:
–Short term leased orchards (typically three-year rolling contracts) whereby the Group recovers costs and shares any profits with the orchard
owners.
–Long term leased land which the Group has developed into productive orchards, pays all development and production costs, owns all crops for
the term of the lease, and shares profit with the landowner after all costs are recovered from crop proceeds.
–Owned orchards whereby the Group incurs growing and harvest costs and receives all orchard income from crop sales.
Post harvest operations
The Group provides post harvest services to the kiwifruit, avocado, citrus, berry, and persimmon industries. This includes all crops from the
Group’s orchard management and lease operations, plus crops from independent orchard owners.
Retail service operations
The Group provides fruit marketing services in New Zealand and internationally, particularly in the Australian and Asian markets. This includes
fruit from the Group’s New Zealand based orchard and post harvest operations. In New Zealand the Group also provides retail and ripening
services for imported fruit, operates a wholesale market, and the post harvest operations relating to kiwiberry.
Retail service operations include the production and selling of Kiwi Crush, Kiwi Crushies and avocado oil to the retail sector and hospitals, along
with post harvest services for kiwiberry.
All other segments - New Zealand
This represents the Group’s aggregated administration, grower services and overhead sections recorded in the statement of profit or loss and
impairment and revaluations of other assets not attributed directly to any other segment. It also includes the gain on sale from assets that had
been classified as held for sale.
Australian operations
The Group grows, provides post harvest services, and retails all produce from orchards the Group owns or leases in Australia. The main products
are kiwifruit, nashi pears and European pears, which are primarily sold in Australia.
This section focuses on the Group’s financial performance and details the contributions made from the individual operating segments.
EBITDA and EBIT
EBITDA is earnings before interest, tax, depreciation, amortisation, impairments and revaluations. EBITDA is an indicator of profitability and
reflects operating cash flow generation.
EBIT is earnings before interest and tax; an indicator of profitability that excludes interest and income tax expenses.
Non-GAAP financial information does not have a standard meaning prescribed by GAAP and therefore may not be comparable to similar financial
information presented by other entities. The Board considers EBITDA and EBIT as useful measures of financial performance for both investors and
management as they are indicators of the Group's operating profitability that remove the impact of tax and the interest expense associated with
debt (EBIT), along with depreciation, amortisation and revaluation expenses associated with the Group's large investments in fixed and leased
assets (EBITDA).
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15SEEKA LIMITED | INTERIM REPORT | JUNE 2023
The following table details the operating segments at balance date.
New ZealandAustraliaGroup
New Zealand dollars
Orchard
operations
$000s
Post harvest
operations
$000s
Retail service
operations
$000s
All other
segments
$000s
Australian
operations
$000s
Total
$000s
June 2023
Income statement
Turnover
1
39,936 151,073 26,907 200 11,646 229,762
Gross segment revenue
39,961 152,919 9,815 200 11,646 214,541
Eliminations
( 25) ( 1,846) - - - ( 1,871)
Total segment revenue
39,936 151,073 9,815 200 11,646 212,670
EBITDA
2
( 1,946) 47,381 1,669 ( 11,553) 874 36,425
Depreciation expense
4
( 408) ( 5,820) ( 151) ( 762) ( 554) ( 7,695)
Lease depreciation expense
5
( 759) ( 3,455) ( 326) ( 288) ( 422) ( 5,250)
Impairment of property, plant and equipment
- ( 121) - - ( 426) ( 547)
Loss on revaluation of property, plant and
equipment
- ( 959) - - -( 959)
Amortisation of intangible assets
- - - ( 180) - ( 180)
EBIT
3
( 3,113) 37,026 1,192 ( 12,783) ( 528) 21,794
Lease interest expense
5
( 320) ( 1,068) ( 154) ( 429) ( 437) ( 2,408)
EBIT
3
(after lease interest expense)
( 3,433) 35,958 1,038 ( 13,212) ( 965) 19,386
Interest expense
6
( 5,751)
Tax charge on profit
( 3,161)
Profit after tax
10,474
Balance sheet
Segment assets
75,876 397,779 15,157 39,752 54,110 582,674
Segment liabilities
48,872 177,708 14,043 33,436 36,039 310,098
Net assets
27,004220,0711,1146,31618,071272,576
June 2022
Income statement
Turnover
1
45,674 178,508 24,053 287 14,402 262,924
Gross segment revenue
45,674 181,534 8,474 287 14,402 250,371
Eliminations
- ( 3,026) - - - ( 3,026)
Total segment revenue
45,674 178,508 8,474 287 14,402 247,345
EBITDA
2
5,087 52,867 489 ( 11,659) 2,576 49,360
Depreciation expense
4
( 434) ( 6,340) ( 180) ( 1,317) ( 523) ( 8,794)
Lease depreciation expense
5
( 822) ( 2,870) ( 297) ( 421) ( 414) ( 4,824)
Impairment of property, plant and equipment
( 111) - - - - ( 111)
Amortisation of intangible assets
- - - ( 235) - ( 235)
EBIT
3
3,720 43,657 12 ( 13,632) 1,639 35,396
Lease interest expense
5
( 374) ( 1,001) ( 156) ( 204) ( 472) ( 2,207)
EBIT
3
(after lease interest expense)
3,346 42,656 ( 144) ( 13,836) 1,167 33,189
Interest expense
6
( 3,124)
Tax charge on profit
( 8,611)
Profit after tax
21,454
Balance sheet
Segment assets
98,055 388,619 23,560 31,015 53,115 594,364
Segment liabilities
52,849 170,082 12,723 36,300 46,799 318,753
Net assets
45,206218,53710,837( 5,285)6,316275,611
1. Turnover is a non-GAAP measure, see calculations in note 2.
2. EBITDA, a non-GAAP measure, is earnings before interest, tax,
depreciation, amortisation, impairments and revaluations.
3. EBIT, a non-GAAP measure, is earnings before interest and tax.
4. Depreciation includes the depreciation of fixed assets.
5. Lease interest and lease depreciation are as a result of NZ IFRS 16
Leases, see note 8.
6. Interest includes finance costs for borrowings.
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED16
The following table reconciles segment EBITDA before and after applying NZ IFRS 16 Leases.
New ZealandAustraliaGroup
New Zealand dollars
Orchard
operations
$000s
Post harvest
operations
$000s
Retail service
operations
$000s
All other
segments
$000s
Australian
operations
$000s
Total
$000s
June 2023 - EBITDA
EBITDA pre NZ IFRS 16
( 3,334) 42,899 1,260 ( 12,305) ( 180) 28,340
Capitalised lease costs
1,388 4,482 409 752 1,054 8,085
EBITDA after applying NZ IFRS 16
( 1,946) 47,381 1,669 ( 11,553) 874 36,425
June 2022 - EBITDA
EBITDA pre NZ IFRS 16
3,760 48,926 63 ( 12,063) 1,525 42,211
Capitalised lease costs
1,327 3,941 426 404 1,051 7,149
EBITDA after applying NZ IFRS 16
5,087 52,867 489 ( 11,659) 2,576 49,360
2. Turnover
The following table reconciles turnover to revenue.
New Zealand dollars
6 months to
June 2023
Unaudited
$000s
6 months to
June 2022
Unaudited
$000s
12 months to
December 2022
Audited
$000s
Turnover
229,762 262,924 383,732
Value of sales made as agent
( 17,092) ( 15,579) ( 35,345)
Revenue
212,670 247,345 348,387
Turnover
The Board considers turnover a useful measure of the Group's operating activity as it represents the total transactional value of goods and
services provided to external customers during the year. As such turnover includes the value of fruit sales made on behalf of growers and suppliers
where the Group acts as the agent, and is considered the supplier by the purchasing party. This includes all produce sales both local and export.
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17SEEKA LIMITED | INTERIM REPORT | JUNE 2023
3. Reconciliation of net operating surplus after taxation with cash flows from operating activities
New Zealand dollars
6 months to
June 2023
Unaudited
$000s
6 months to
June 2022
Unaudited
$000s
12 months to
December 2022
Audited
$000s
Net operating surplus after taxation
10,474 21,454 6,504
Add / (less) non cash items:
Depreciation
7,695 8,794 16,055
Lease depreciation
5,250 4,824 9,516
Impairment of biological assets
- - 191
Impairment of intangible assets
- - 681
Impairment of property, plant and equipment
547 111 144
Loss on revaluation of property, plant and equipment
959 - -
Revaluation of employee share scheme
- 38 38
Revaluation of grower share scheme
- 9 9
Movement in deferred tax
( 1,245) 2,830 4,431
Movement in fair value of biological assets - crop
16,329 16,240 35
Amortisation of intangible assets
180 235 406
29,715 33,081 31,506
Add / (less) items not classified as an operating activity:
(Gain) on sale of property, plant and equipment
( 28) ( 131) ( 138)
(Gain) on sale of assets classified as held for sale
- - ( 364)
Decrease in current water allocation account
48 130 133
20 ( 1) ( 369)
(Increase) / decrease in working capital:
(Increase) in accounts receivable / prepayments
( 42,163) ( 43,619) ( 6,725)
(Increase) in inventory
( 2,955) ( 10,361) ( 2,593)
Increase / (decrease) in accounts payable
4,995 19,889 ( 3,730)
Increase / (decrease) in taxes due
4,395 ( 1,301) ( 12,465)
( 35,728) ( 35,392) ( 25,513)
Net cash flow from operating activities
4,481 19,142 12,128
Accounting policies
Cash flows statements are prepared using the direct approach. Cash and cash equivalents are shown exclusive of GST.
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED18
Critical accounting estimates and judgements
The Group used judgement to recognise the remaining orchards as held for sale, despite one being held for sale for greater than 12 months.
This judgement is based on the ability to obtain a buyer for the assets classified as held for sale. This is impacted by external real estate market forces
and changes to this estimate may result in the balance being reclassified to a non-current asset.
Assets
This section focuses on how the Group manages its assets to generate revenues and deliver benefits to stakeholders.
Disclosures are made on additions, disposals, revaluations, depreciation, impairments and amortisation.
4. Assets classified as held for sale
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Opening balance at 1 January
6,293 1,898 1,898
SunGold licence transferred from intangible assets
- 481 491
Water shares transferred from intangible assets
- - 3,283
Transfers from property, plant and equipment
- 2,375 1,915
Development costs incurred
86 - 313
Sales settled by third parties at carrying value
( 3,283) - ( 1,607)
Total assets classified as held for sale
3,096 4,754 6,293
The following table details the assets classified as held for sale by asset class.
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Asset class
Land and buildings
943 2,482 943
Property, plant and equipment
380 475 380
Intangible assets
500 481 3,783
Bearer plants
645 1,316 645
Bearer plants under development
628 - 542
Total assets classified as held for sale
3,096 4,754 6,293
At 30 June 2023, 16.6 hectares of Northland orchards (Jun 2022 - 29.4 hectares) and nil hectares of Ōpōtiki orchards (Jun 2022 - 3.5 hectares)
owned by Seeka were classified as held for sale. No growing costs have been attributed to these remaining orchards at 30 June 2023 as they are
valued on a crop-off basis.
Assets are classified as held for sale when their carrying amount will be recovered principally through a sale transaction rather than through
continuing use. This condition is met when the sale is highly probable and the assets are available for immediate sale in their present condition,
and the Group is committed to the sale and expects it to be completed within one year from the date of classification. The accounting standard
allows for the period to extend past 12 months if the circumstances causing the delay are out of Seeka's control. As at 30 June 2023 one orchard
of 13.5 hectares (Jun 2022 - one orchard of 13.5 hectares) has taken longer than 12 months to find a willing buyer, however Seeka remains
committed to selling the property and a sale is anticipated within the next 12 months. Assets classified as held for sale are recorded at the lower of
the carrying value or fair value less costs to sell.
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19SEEKA LIMITED | INTERIM REPORT | JUNE 2023
5. Property, plant and equipment
New Zealand dollars
Land and
buildings
$000s
Plant and
equipment
$000s
Motor
vehicles
$000s
Bearer
plants
$000s
Assets under
construction
$000s
Total
$000s
At 1 January 2023
Cost or valuation
280,850 150,667 3,131 37,187 21,311 493,146
Accumulated depreciation and impairment
( 29,912) ( 82,056) ( 1,249) ( 3,746) ( 395) ( 117,358)
Net book amount
250,938 68,611 1,882 33,441 20,916 375,788
Six months ended 30 June 2023
Opening net book amount
250,938 68,611 1,882 33,441 20,916 375,788
Additions and transfers - net
14,422 4,792 - 1,369 ( 11,138) 9,445
Depreciation
( 3,015) ( 4,415) ( 145) ( 120) - ( 7,695)
Disposals
- ( 58) ( 252) - - ( 310)
Impairment
( 122) ( 425) - - - ( 547)
Revaluation
( 12,763) - - - - ( 12,763)
Reclassification to intangible assets
- ( 17) - - - ( 17)
Foreign exchange
272 94 6 289 1 662
Closing net book amount
249,732 68,582 1,491 34,979 9,779 364,563
At 30 June 2023
Cost or valuation
282,781 155,478 2,885 38,845 10,174 490,163
Accumulated depreciation and impairment
( 33,049) ( 86,896) ( 1,394) ( 3,866) ( 395) ( 125,600)
Net book amount
249,732 68,582 1,491 34,979 9,779 364,563
Assets under construction are assets that are yet to be capitalised and are not depreciated. When the asset is ready for use it is transferred to
the appropriate asset class. At 30 June 2023 the assets under construction relate to Sharp Road RSE accommodation $3.40m, and investment in
automation at Seeka Gisborne $3.93m.
Land and buildings
Land and buildings are revalued to their estimated market value on a three-year rolling cycle (excluding assets under construction), plus
any subsequent additions at cost, less subsequent depreciation for buildings. In New Zealand valuations were undertaken by CBRE Limited,
independent registered valuer.
In Australia valuations were undertaken by Opteon (Goulburn North East Vic) Pty Ltd, independent valuers based in Victoria, Australia. All
Australian land and buildings were revalued at 31 December 2022.
As at 30 June 2023 the directors believe there are indicators that would suggest that the carrying value of land and buildings differs materially
from their fair value. As a consequence, the Group has performed a desktop fair value calculation, adjusting the market capitalisation and market
rental rates for the circumstances present at 30 June 2023, and has calculated a reduction in the valuation of $12.8m. This is related to land and
buildings, and has been applied against the revaluation reserve accounts for all properties apart from one property, which did not have revaluation
reserves and was recorded in the statement of profit and loss.
Impairment
In the six months to June 2023, $0.43m of hail netting assets in Australia, and $0.12m of fixed electrical assets were impaired. In the six months
ended June 2022, $0.11m of assets were impaired relating to capitalised structures on a long-term-leased orchard.
Critical accounting estimates and judgements
At 30 June 2023, the Group has performed a desktop fair value calculation to determine the value of the land and buildings by adjusting the market
capitalisation and market rental rates for the conditions present at 30 June 2023, and has calculated a reduction in the value of land and buildings of
$12.8m, being a reduction in revaluation reserves of $11.8m and a loss on revaluation through the statement of profit and loss of $1.0m.
Independent valuations will be obtained at 31 December 2023 in line with the accounting policies of the Group.
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED20
6. Intangible assets
New Zealand dollars
Software
$000s
Goodwill
$000s
Water shares
$000s
Other
intangibles
$000s
Total
$000s
At 30 June 2023
Cost
4,457 22,212 5,373 377 32,419
Accumulated amortisation and impairment
( 3,583) ( 2,031) - - ( 5,614)
Net book amount
874 20,181 5,373 377 26,805
The following table details the key assumptions used for value-in-use calculations and the recoverable amount.
Group cash generating unitsOperating segment
Goodwill
carrying
amount
$000s
Pre tax
discount rate
EBITDA
growth rate
1-5 years
Terminal
growth rate
June 2023
Post harvestPost harvest operations
20,181 11.5%1.8% - 12.1%2.0%
Impairment tests for goodwill
At 30 June 2023, indicators of impairment existed, including the market capitalisation and industry circumstances as described in the Basis of
Preparation note, and the impairment of land and buildings as outlined in note 5. In response the Group has performed impairment tests on all cash
generating units (CGUs), in addition to CGUs with goodwill balances to ensure that future cash flows of the CGUs and the Group support the fair
value of the assets.
The impairment tests have been performed using a value in use calculation model. No material impairment was identified.
The recoverable amount is based on the net present value of the five-year after-tax cash flow projection (value-in-use), with a terminal value
beyond five years. Cash flows beyond the five year period are extrapolated using estimated growth rates and discount rates stated in this note. The
assumptions used for the analysis of the net present value of forecast gross margin for the cash generating unit is determined based on forecast
crop volumes, past financial performance and the Board's expectations of future market dynamics, plus the Group's five year financial plans.
The impairment tests have incorporated the lower volumes in the 2023 harvest and a more conservative forward looking growth profile of kiwifruit
volumes over the five years. It is anticipated that the 2024 harvest will be significantly better than the previous two years, which is a view supported
by the industry.
The Goodwill and asset value allocated to the post harvest CGU is supported by historical profitability, increasing volume forecasts, and forecast
growth of the kiwifruit industry and returns. The 2022 and 2023 harvest have been impacted by lower yields. The headroom in the post harvest
CGU has reduced, after impairing the land and buildings assets (see note 5), however there is no impairment identified as at 30 June 2023.
The impact of climate change has been incorporated to the extent that it impacts the forecasts and considered as part of scenario planning from an
operational capacity planning perspective. Scenario planning is being carried out across the Company to model for the impact of climate change on
future yields.
Seeka has a long history of adapting to the environment, such as when Psa arrived in New Zealand and the industry pivoted to the SunGold variety,
alongside past climatic events such as droughts, hail, and floods. The business will continue to adapt to the changing environment.
Critical accounting estimates and judgements
The goodwill impairment tests require judgement to determine the appropriate forecast cash flows and inputs into the calculations. The primary
estimates relate to the forecast EBITDA growth rates, discount rates, WACC and terminal growth rates.
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21SEEKA LIMITED | INTERIM REPORT | JUNE 2023
7. Biological assets - crop
Crops growing on bearer plants are classified as biological assets and measured at fair value.
Crop assets are kiwifruit, nashi pears, Packham pears, Corella pears, other pears, cherry, avocado, and plum crops growing on leased and owned
orchards and yet to be harvested at balance date.
The following table reconciles beginning balances to end balances for biological assets crop measured at fair value.
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Carrying amount at beginning of period
18,408 18,443 18,443
Crop harvested during the period
Fair value movement from the beginning of the period to point of harvest
3,126 11,892 12,075
Fair value when harvested
( 21,534) ( 30,335) ( 30,518)
Crop growing on bearer plants at end of period
Crop at cost
2,079 2,203 18,345
Crop at fair value
- - 63
Carrying value at end of period
2,079 2,203 18,408
The following table reconciles fair value movement of biological assets - crop.
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Movement in carrying amount
( 16,328) ( 16,417) ( 59)
Exchange differences
( 1) 177 24
Net fair value movement in crop
( 16,329) ( 16,240) ( 35)
The following table details the classification of biological assets - crop.
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Australia - all varieties
737 755 4,007
New Zealand - kiwifruit crop
1,127 1,160 13,597
New Zealand - other crop (avocado, citrus, kiwiberry)
215 288 804
Carrying value at end of period
2,079 2,203 18,408
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INTERIM REPORT | JUNE 2023 | SEEKA LIMITED22
8. Right-of-use lease assets and lease liabilities
The Group reports all leases on the balance sheet where it has the right to obtain substantially all of the economic benefits from the use of the asset
throughout the period of the lease, with the exception of low value leases or leases less than 12 months.
The following table details leases where the Group is a lessee.
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Right-of-use lease assets
Land and buildings
32,706 29,185 32,884
Orchard leases
16,764 18,387 17,310
Equipment
2,437 3,834 2,812
Motor vehicles
3,054 3,087 2,799
Total right-of-use lease assets
54,961 54,493 55,805
The movements for the period are:
Opening balance
55,805 49,885 49,885
Additions and renewals
4,584 9,475 16,269
Disposals, reclassifications and early terminations
( 313) ( 336) ( 944)
Exchange rate differences
135 293 111
Depreciation
( 5,250) ( 4,824) ( 9,516)
Closing balance
54,961 54,493 55,805
The classification for depreciation of right-of-use lease assets is as follows:
Land and buildings
2,1891,796 3,793
Orchard leases
8871,038 1,386
Equipment
1,082 981 2,254
Motor vehicles
1,0921,009 2,083
Total depreciation of right-of-use lease assets
5,250 4,824 9,516
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Lease liabilities
Current
9,659 8,783 9,631
Non-current
59,556 59,313 60,434
Total lease liabilities
69,215 68,096 70,065
The liabilities are classified as:
Lease liabilities
Land and buildings
37,770 34,117 37,614
Orchard leases
25,633 27,003 26,148
Equipment
2,529 3,763 3,274
Motor vehicles
3,283 3,213 3,029
Total lease liabilities
69,215 68,096 70,065
The movements for the period are:
Lease liability movements
Opening balance
70,065 63,367 63,367
Additions and renewals
4,653 9,475 16,796
Disposals, reclassifications and early terminations
( 166) ( 365) ( 873)
Exchange rate differences
185 561 6
Principal lease payments
( 5,522) ( 4,942) ( 9,231)
Closing balance
69,215 68,096 70,065
Additions
During the period ended 30 June 2023, the Group renewed $1.64m of leases relating to post harvest coolstorage facilities, $0.55m of leases
relating to retail service facilities, and $1.82m of leases relating to vehicles and equipment leases.
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23SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Working capital
This section focuses on how the Group manages inventories, accounts receivable and accounts payable to ensure an
appropriate level of working capital is available to operate the business, deliver benefits to stakeholders and generate revenues.
9. Trade and other receivables
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Current trade receivables (net of provision for doubtful debts)
42,698 57,336 20,109
Prepayments
7,424 6,491 3,203
Prepaid deposits
608 819 619
Accrued income and other sundry receivables
43,574 42,124 9,216
Current trade and other receivables
94,304 106,770 33,147
Non current trade receivables
6,377 2,652 5,099
Non current trade and other receivables
6,377 2,652 5,099
Total trade and other receivables
100,681 109,422 38,246
Current trade receivables include temporary advances to Seeka kiwifruit grower pools of $19.28m (Jun 2022 - $33.70m). These advances are
largely repaid in July 2023, but will be fully repaid by December 2023.
Accrued income and other sundry receivables includes $12.27m (Jun 2022 - $18.93m) of income for kiwifruit harvested and delivered to Zespri
from Seeka's New Zealand orchards, $27.81m (Jun 2022 - $19.78m) for New Zealand post harvest operations, and $1.78m (Jun 2022 - $3.15m) of
income for kiwifruit and pears harvested in Australia.
Income from the New Zealand kiwifruit is accrued based on forecast information prepared by the Group, being an average Hayward HW orchard
gate return (OGR) of $8.14 per tray (Jun 2022 - $6.62: Dec 2022 - $6.10) and an average SunGold G3 OGR of $10.56 per tray (Jun 2022 - $11.03:
Dec 2022 - $11.03).
At 30 June 2023, non-current trade receivables includes $3.82m (Dec 2022 - $2.20m) losses carried forward on Hayward short term leased
orchards to be recovered in a future period when the orchards return to a profit making position expected in the 2024 harvest. The remaining
balance of non-current trade receivables relates to debtors secured against crop supply commitments with repayment terms of up to five years
and is considered recoverable.
10. Inventories
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Crop inventories
5,057 11,034 -
Total packaging at cost
6,169 4,387 8,618
Other inventories at cost
3,458 2,532 3,282
Total inventories
14,684 17,953 11,900
Fruit inventories relate to kiwifruit harvested from New Zealand and Australian orchards and held in coolstores at balance date. Fruit inventory
from fruit harvested from the Group’s Australian orchards is based on actual and forecast market returns for each variety.
At balance date, $28.53m (Jun 2022 - $37.07m ) of packaging inventory costs were expensed to cost of sales in the statement of profit or loss.
There were no material inventory write downs (Jun 2022 - Nil).
Main contents
Financial contents
INTERIM REPORT | JUNE 2023 | SEEKA LIMITED24
11. Trade and other payables
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Trade payables
16,074 18,674 6,329
Accrued expenses
11,839 17,705 17,940
Employee expenses
6,169 12,510 6,619
GST payable
1,002 1,728 1,853
Other payables
159 1,593 37
Total trade and other payables
35,243 52,210 32,778
Trade payables includes $3.60m (Jun 2022 - $5.01m, Dec 2022 – Nil) of packaging costs relating to post harvest operation and $0.12m (Jun 2022
- $1.45m) of packhouse automation costs, see note 5.
Accrued expenses include $1.85m (Jun 2022 - $9.43m) of kiwifruit costs relating to kiwifruit harvested and to be delivered to Zespri from the
Group’s New Zealand orchards.
Financial contents
Main contents
25SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Interest bearing liabilities, dividends, share capital and fair value
This section focuses on how the Group funds its operations, pays dividends to grow shareholder returns, manages its share
capital, and determines the fair value of its financial assets, securities and liabilities so it can deliver benefits to stakeholders.
Disclosures are made on the Group's bank facilities, dividends paid to shareholders, share capital, and other disclosures.
12. Interest bearing liabilities
New Zealand dollars
June 2023
Unaudited
$000s
June 2022
Unaudited
$000s
December 2022
Audited
$000s
Current
Interest bearing liabilities
53,889 30,658 23,110
Capitalised loan fees to be amortised in the next 12 months
( 168) ( 110) ( 240)
Total current interest bearing liabilities
53,721 30,548 22,870
Non-current
Interest bearing liabilities
128,514 138,780 128,151
Remaining capitalised loan fees to be amortised
( 43) ( 288) ( 79)
Total non-current interest bearing liabilities
128,471 138,492 128,072
Total interest bearing liabilities
182,192 169,040 150,942
Analysis of movements in borrowings:
At 1 January
150,942 113,003 113,003
Cash flow - additional borrowings
90,257 67,610 114,753
Cash flow - repayment of borrowings
( 59,505) ( 16,846) ( 81,391)
Loans acquired via acquisition
- 4,175 4,175
Capitalised loan fees - amortised over the life of the loan
107 110 188
Exchange differences
391 988 214
At balance date
182,192 169,040 150,942
Analysis of total facilities:
Drawn
182,192 169,040 150,941
Available
18,859 42,369 59,616
Total facilities
201,051 211,409 210,557
New Zealand dollars
Balance due
$000sInterest rate
Maturity
Term loans as at 30 June 2023
AUD $17m
18,514 6.58%31 January 2025
NZD $40m
40,000 4.97%31 January 2025
NZD $50m
50,000 5.39%31 January 2026
NZD $20m
20,000 8.11%31 January 2025
Refinancing
In the six months to 30 June 2023, Seeka has engaged with its banking syndicate and has refinanced its banking facilities into a Sustainability-
Linked Loan facility of NZD$201 million.
The facilities have extended maturity dates, with 61% extended to 31 January 2025 and the remainder extended to 31 January 2026.
As part of the refinancing, Seeka has obtained a waiver for the net leverage ratio and interest cover ratio for the 30 June 2023 and 31 December
2023 testing periods. The 30 June 2024 and 31 December 2024 banking covenants have been set on a “step down” basis to enable the Group to
reach its long term covenants of 3.25x for the net leverage ratio and 2.00x for the interest cover ratio.
Main contents
Financial contents
INTERIM REPORT | JUNE 2023 | SEEKA LIMITED26
13. Dividends
In the last 12 months, no dividends were paid (prior 12 months $0.26 per share).
As part of the refinancing, as described in note 12, the restrictions placed on dividend payments was amended from a required net leverage ratio
not exceeding 3.75:1.00 during the period of 30 June 2023 to 29 June 2024, to a net leverage ratio not exceeding 3.25:1.00.
14. Share capital
During the period to 30 June 2023, $0.06m (Jun 2022 - $1.22m) was received in relation to shares issued under the Employee share scheme
established in 2019 (including funds from the vesting of the schemes).
15. Determination of fair values of financial assets and liabilities
The following table analyses financial assets and liabilities carried at fair value as at 30 June 2023.
The different levels are defined as:
–Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Instruments in level 1 are comprised of water shares and irrigation water rights.
–Level 2: inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.
–Level 3: unobservable inputs for the asset or liability that have to be developed to reflect the assumptions that a market participant would use
when determining an appropriate price.
New Zealand dollars
Level 1
$000s
Level 2
$000s
Level 3
$000s
Total
$000s
Water shares
5,373 - - 5,373
Irrigation water rights
20 - - 20
Land
- - 45,178 45,178
Buildings
- - 204,554 204,554
Other financial assets
- - 623 623
Derivatives used for hedging - assets
- 3,227 - 3,227
The following table shows the valuation techniques used in the determination of fair values within level 3 of the hierarchy, as well as the key
unobservable inputs used in the valuation models.
TypeFair valueMethodKey unobservable inputs
How unobservables impact
estimated fair value
Land and buildings$ 249.73 mAn annual revaluation is used
to estimate fair value, which
is performed on at least one
third of land and buildings on
a rolling 3-year cycle by an
independent valuer using four
different approaches; replacement
cost approach, sales approach,
investment approach and
discounted cash flow approach. See
accounting policies and note 5 for
further details.
Comparative market
rents and applicable
discount rate.
Comparative market
sales.
Current level of building
costs.
Increases with market
rental, and lower
discount rates.
Increases with market
sales.
Increases with building
costs.
Other financial assets.$ 0.62 mCalculating the present value
of expected cash flows using
contractual interest rates, expected
repayment dates and discount rate.
Repayment dates.
Discount rates.
Increases with an earlier
repayment date.
Increases with a lower
discount rate.
Financial contents
Main contents
27SEEKA LIMITED | INTERIM REPORT | JUNE 2023
16. Related party transactions
The Group undertakes transactions with Seeka Growers Limited (SGL), a related party which administers all kiwifruit revenues received for
the New Zealand business on behalf of supplying growers. In the current period the Group received $189.58m (Jun 2022 - $139.03m) for the
provision of services to SGL.
17. Capital commitments
As at 30 June 2023 the Group was committed to incur capital expenditure of $2.38m (Jun 22 - $4.35m; Dec 22 - $8.00m).
This included planned expenditure on the RSE accommodation at Sharp Road, $0.46m for an investment in an associate, and the final stages of the Seeka
Gisborne packhouse automation project.
18. Events occurring after balance date
On 31 July 2023, Independent Director Robert Farron resigned from the Seeka Board of Directors, and the Audit and Risk Committee, effective 4
August 2023. Fred Hutchings became a member of the Audit and Risk Committee effective 4 August 2023, and Ashley Waugh became the Chair
of the Audit and Risk Committee effective 4 August 2023.
There are no other events occurring subsequent to balance date requiring adjustment to or disclosure in the interim financial statements.
Main contents
Financial contents
INTERIM REPORT | JUNE 2023 | SEEKA LIMITED28
Directory
Board of directors
Fred Hutchings – Chair
Hayden Cartwright
Peter Ratahi Cross
Stewart Moss
Cecilia Tarrant
Ashley Waugh
Robert Farron (resigned effective 4 August 2023)
Audit and risk committee
Ashley Waugh – Chair (effective 4 August 2023)
Hayden Cartwright
Fred Hutchings – (member from 4 August 2023)
Robert Farron – (resigned as chair and member effective 4 August 2023)
Sustainability committee
Cecilia Tarrant – Chair
Peter Ratahi Cross
Fred Hutchings
Remuneration committee
Fred Hutchings – Chair
Stewart Moss
Cecilia Tarrant
Company officers
Michael Franks
Chief Executive Officer
Nicola Neilson
Chief Financial Officer and Company Secretary
Senior management team
Michael Franks
Chief Executive
Nicola NeilsonKate BryantPaul Crone
Chief Financial OfficerGM Corporate ServicesGM Post Harvest
Barry PenellumJonathan van PoperingJim Smith
GM OrchardsGM Australian OperationsGM Growers and Marketing
Main contents
29SEEKA LIMITED | INTERIM REPORT | JUNE 2023
Registered office
Seeka Limited
34 Young Road, RD9, Paengaroa 3189
PO Box 47, Te Puke 3153
Seeka.co.nz
Auditor
PricewaterhouseCoopers
Auckland
www.pwc.co.nz
Bankers
1
Westpac New Zealand Limited
Auckland
www.westpac.co.nz
Westpac Banking Corporation
Melbourne
www.westpac.com.au
ASB Bank Limited
Auckland
www.asb.co.nz
Bank of New Zealand
Auckland
www.bnz.co.nz
Coöperatieve Rabobank U.A. (Rabobank)
Wellington
www.rabobank.co.nz
Share register
Link Market Services Limited
Auckland
www.linkmarketservices.co.nz
NZX
www.nzx.com
Legal advisors
Harmos Horton Lusk Limited
Auckland
www.hhl.co.nz
Tompkins Wake
Tauranga
www.tompkinswake.com
1. All banks are lenders under a syndicated facilities
agreement with Westpac New Zealand as the agent.
Main contents
seeka.co.nz
34 Young Road, RD 9, Te Puke 3189
PO Box 47, Te Puke 3153, New Zealand
+64 7 573 0303, info@seeka.co.nz
---
INTERIM RESULTS ANNOUNCEMENT JUNE 2023 | SEEKA LIMITED1
SEEKA SIX MONTHS UNAUDITED INTERIM RESULTS
30 June 2023
Listed New Zealand produce company Seeka, reports its unaudited interim results for the six months ended 30 June 2023.
$212.7m Revenue – down 14% on six months to June 2022 previous corresponding period (pcp)
$36.4m EBITDA – down 26% on pcp
$13.6m NPBT – down 55% on pcp
"Seeka's financial performance was impacted by the large drop in kiwifruit yields in 2023," says chief executive
Michael Franks.
"The warm winter of 2022, followed by a wet summer, cyclones Hale and Gabrielle, and autumn hail, all had a major
impact on New Zealand's horticultural industry. Growers and fruit handlers across all sectors are contending with a
large drop in yields, which is impacting revenues and profitability.
"Despite the smaller crop, Seeka has delivered excellent operational performance. Seeka remains obsessed with
quality, and we delivered an excellent harvest service to our supplying growers and quality kiwifruit to the markets.
International sales are reported to be strong, and we are anticipating a significant lift in tray returns to growers and
Seeka's orchard operations.
"Having made large investments in automation, Seeka now has the capacity to handle more than 50 million trays of
kiwifruit with facilities in Northland, the Coromandel, Bay of Plenty and Gisborne regions. Our highly-automated post
harvest systems have delivered efficiency gains to Seeka and our supplying growers, and provide the packing power
to efficiently manage the harvest process.
"We have created a leaner business and are now focussed on preparing for 2024. Kiwifruit vines like the cold winter
conditions we are currently having, and the shift to an El Niño weather pattern is ideal for a rebound in yields in 2024.
"New Zealand's kiwifruit industry has a vibrant outlook, and growers are continuing to invest in new SunGold and
RubyRed orchard developments. Our investments in post harvest automation means Seeka is well prepared to
handle the upcoming lift in national kiwifruit production as we work to supply the world with premium New Zealand
kiwifruit."
Dividend
The Board has determined that no dividend is payable.
Full year operational guidance
Seeka’s full year outlook is dynamic. Full year net profit before tax is forecast to be a loss between $20m and $25m.
New Zealand dollars ($ millions)
FY23
Guidance
Lower range
FY23
Guidance
Upper range
FY22
Audited
Net profit / (loss) before tax
( 25)( 20)7.6
Seeka reminds stakeholders that it operates in a seasonal industry with substantial earnings occurring in the first six
months as fruit is harvested in New Zealand and Australia.
23 August 2023
Company announcement
INTERIM RESULTS ANNOUNCEMENT JUNE 2023 | SEEKA LIMITED2
Operational performance
The following table outlines Seeka’s performance to 30 June.
New Zealand dollars
6 months to
June 2023
Unaudited
6 months to
June 2022
UnauditedChange
Total revenue ($m)
$ 212.7$ 247.3
( 14%)
EBITDA before impairments and revaluations ($m)
$ 36.4$ 49.4
( 26%)
EBIT ($m)
$ 21.8$ 35.4
( 38%)
NPBT ($m)
$ 13.6$ 30.1( 55%)
NPAT ($m)
$ 10.5$ 21.5
( 51%)
Net bank debt ($m)
$ 177.0$ 161.3
10%
Basic earnings per share
$0.25$0.52
( 52%)
This announcement should be read in conjunction with Seeka Limited's June 2023 interim report (unaudited), and
December 2022 annual report (audited). Seeka reports can be found on Seeka's website www.seeka.co.nz/reports.
EBITDA
EBITDA before revaluations and impairments is considered by Seeka's Board to be a key measure of performance.
New Zealand dollars ($000s)
6 months to
June 2023
Unaudited
6 months to
June 2022
UnauditedChange
12 months to
December 2022
Audited
Net profit before tax
13,63530,065( 55%)7,593
Interest expense
5,751 3,124 7,204
Lease interest expense
2,408 2,207 4,289
EBIT
21,794 35,396 ( 38%)19,086
Impairments and revaluations
Depreciation expense
7,6958,79416,055
Lease depreciation expense
5,2504,8249,516
Impairment of property, plant and equipment
547111144
Loss on revaluation of property, plant and equipment
959--
Impairment of biological assets
--191
Impairment of intangible assets
--681
Amortisation of intangible assets
180235406
EBITDA before impairments and revaluations
36,425 49,360 ( 26%)46,079
Reconciliation before and after applying NZ IFRS 16 Leases.
New Zealand dollars ($000s)
6 months to
June 2023
Unaudited
6 months to
June 2022
UnauditedChange
12 months to
December 2022
Audited
EBITDA pre NZ IFRS 16
28,340 42,211 ( 33%)32,559
Capitalised lease costs (cash cost)
8,085 7,149 13%13,520
EBITDA after applying NZ IFRS 16
36,425 49,360 ( 26%)46,079
ENDS
For more information, visit www.seeka.co.nz or please call:
Michael FranksNicola Neilson
Chief executive
+ 64 21 356 516
Chief financial officer
+ 64 21 841 606
---
Analyst Briefing Pack
Unaudited Interim Results
Six months to 30 June 2023
To be read in conjunction with Seeka Interim Report June 2023, and Seeka Annual Report December 2022, see Seeka.co.nz/investors
Agenda
2
5
Contact
4
Forward focus
3
Operating segments performance
2
Balance sheet
1
Six month highlights
Six month highlights
Summary – Weathered the storm
Challenging six months as adverse weather impacted kiwifruit yields; warm winter, wet summer, frost, cyclones, flooding, hail
$212.7m Revenue | $36.4m EBITDA | $13.6m NPBT | $0.25 EPS | Seeka’s Hayward yields down 30% and SunGold down 22%
Delivered excellent operational performance
Innovative improvements incorporated in processes | New automation commissioned | Low fruit loss | Quality produce to markets
$582.7m total assets, $6.01 net tangible asset backing per share
Investment in core business, capacity and automation
$182.2m bank debt
Bank debt reduction remains a focus | Full banking syndicate support | Short term covenant waivers in place
$201m Sustainability Linked Loan
Aiming to achieve targets on decarbonisation, solar panel installation and worker safety | Interest discounts and penalties applied based on performance
Cost management and focussed capital expenditure
Innovative captive insurance company structure implemented | Capacity and systems in place to manage forecast volumes
Outlook improved
Favourable weather pattern | Positive winter chill | Planning for resurgence in volumes | Success in retail services | Developments in Australia
1
2
3
4
5
4
6
7
Group financial performance
$212.7m Revenue
Down 14% on pcp
$48.4m Gross profit
Down 22% on pcp
$36.4m EBITDA
Down 26% on pcp
$13.6m Net profit before tax
Down 55% on pcp
Seeka operates a seasonal business
−H1 is main operating period for core kiwifruit business
5
Interim results – six months to June 2023, unaudited
H1 FY23H1 FY22FY22
$ millions
UnauditedUnauditedChangeAudited
Revenue212.7 247.3
( 14%)
348.4
Cost of sales147.9 169.1
( 13%)
280.1
Change in fair value of biological
assets - crop
(16.3)(16.2)-
Gross profit48.5 62.0
( 22%)
68.3
EBITDA36.449.4
( 26%)
46.1
EBIT21.835.4
( 38%)
19.1
Net profit before tax13.630.1
( 55%)
7.6
Net profit after tax10.521.5
( 51%)
6.5
Trends in financial performance
EBITDA, NPAT and Total Assets
H1FY20 NPAT included a one-off $5.6m tax benefit from a change in tax deductibility of depreciation on buildings. All results and comparatives consistent with NZ IFRS 16 Leases.
6
$27.9m
$30.4m
$46.9m
$49.4m
$36.4m
H1FY19H1FY20H1FY21H1FY22H1FY23
EBITDA
$11.9m
$18.4m
$20.6m
$21.5m
$10.5m
$12.8m
H1FY19H1FY20H1FY21H1FY22H1FY23
NPAT
$5.6m
deferred
taxgain
base
NPBT
$406m
$416m
$519m
$594m
$583m
H1FY19H1FY20H1FY21H1FY22H1FY23
Total Assets
Trends in operating segment performance
EBITDA
7
$29.8m
$30.3m
$49.1m
$52.9m
$47.4m
H1FY19H1FY20H1FY21H1FY22H1FY23
Post harvest
$4.2m
$4.2m
$5.7m
$5.1m
($1.9m)
H1FY19H1FY20H1FY21H1FY22H1FY23
Orcharding
$0.8m
$1.3m
$1.9m
$0.5m
$1.7m
H1FY19H1FY20H1FY21H1FY22H1FY23
SeekaFresh retail services
($0.2m)
$1.9m
$2.7m
$2.6m
$0.9m
H1FY19H1FY20H1FY21H1FY22H1FY23
Australia
Balance sheet
Balance sheet
$14.3m increase in capital employed on H1FY22
$6.0m increase in PPE since H1 FY22
−Automation and capacity investments
−Coolstore innovation and capacity
Capital employed at 30 June
9
H1 FY23H1 FY22FY22
$ millionsUnauditedUnauditedChangeAudited
Current assets - excludes cash
Trade and other receivables94.3106.8
( 12%)
33.1
Biological assets - crop2.12.2
( 5%)
18.4
Assets held for sale3.14.8
( 35%)
6.3
Inventories and water rights14.718.0
( 18%)
12.0
114.2131.7
( 13%)
69.9
Current liabilities - excludes debt
Trade and other payables( 35.2)( 52.2)
( 33%)
( 32.8)
Tax( 1.9)( 8.2)
(77%)
( 0.3)
( 37.1)( 60.4)
( 39%)
( 33.1)
Net working capital77.171.3
8%
36.8
Non current assets
Property, plant and equipment364.6 358.6
2%
375.8
Lease assets55.0 54.5
1%
55.8
Intangibles26.8 31.0
( 14%)
26.9
Investments and receivables17.0 10.7
59%
15.9
463.4 454.9
2%
474.4
Capital employed540.5 526.2
3%
511.2
H1 FY23H1 FY22FY22
$ millionsUnauditedUnaudited
Change
Audited
Non current liabilities - excludes debt
Lease liabilities
(current and non current)
( 69.2)( 68.1)
(2%)
( 70.1)
Deferred tax( 21.6)( 21.2)
(2%)
( 22.8)
( 90.8)( 89.3)
(2%)
( 92.9)
Cash( 5.2)( 7.8)
33%
( 3.6)
Borrowings182.2169.0
8%
150.9
Net bank debt177.0161.3
10%
147.4
Total equity272.6275.6
(1%)
270.9
Net bank debt177.0 161.3
10%
147.4
Net bank debt
excluding assets held for sale
173.9156.5
11%
141.1
EBITDA multiple4.77x 3.17x
3.06x
EBITDA multiple
pre NZ IFRS 16 Leases
6.14x 3.71x
4.33x
Balance sheet
$177.0m net bank debt at June 2023
−$15.7m increase on June 2022
−Automation and capacity investments
New Sustainability-Linked Loan
−Reduce greenhouse gas emissions
−Increase solar generation
−Continue to improve health and safety
$201m facility from banking syndicate
−Covenant waivers for 2023 and reset for 2024
−Full support of banking syndicate
−Dividends planned to recommence when
covenant thresholds met
$3.1m of orchard assets held for sale
Net bank debt at 30 June
10
Earnings per share and dividends
25 cents earnings per share
$6.01 net tangible assets per share – down 1%
Nil dividend
11
H1 FY23H1 FY22FY22
UnauditedUnauditedChangeAudited
Net profit $ 10.5 m $ 21.5 m
( 51%)
$ 6.5 m
Weighted shares on issue41.6 m 41.0 m 41.3 m
Earnings per share$ 0.25 $ 0.52 ( 52%)$ 0.16
Net tangible assets$ 252.4 m $ 254.8 m
(1%)
$ 250.8 m
Shares at period end42.0 m 42.0 m 42.0 m
Net tangible assets per share$ 6.01 $ 6.07 (1%)$ 5.97
FY23 full year operational guidance
Forecasting full-year net loss before tax between
($20m) and ($25m)
12
Seeka provide 2023 guidance
FY23FY23FY22
GuidanceGuidanceFull year
$ millions
Lower rangeUpper rangeActuals
Net profit / (loss) before tax
(25m)(20m)7.6m
Operating segment performance
Orchard operations
$39.9m Revenue – down 13% on pcp
($1.9m) EBITDA
Yields reduced due to significant adverse weather
events
−SunGold down 22%
−Hayward down 30%
−Hayward yields at 10 year low
Picking innovations created operational
improvements
$19m invested in developing orchards for future
growth
Continued partnerships with Iwi and regional
investments
Growing kiwifruit, avocado and kiwiberry for New Zealand orchard owners
14
H1 FY23H1 FY22FY22
$ millionsUnauditedUnaudited
Change
Audited
Revenue39.9 45.7
( 13%)
80.5
EBITDA( 1.9)5.1
( 138%)
4.6
EBIT( 3.1)3.7
( 183%)
2.2
Segment assets75.9 98.1
( 23%)
84.9
EBITDA pre NZ IFRS 16( 3.3)3.8
( 189%)
1.4
Crop grown- class 1 trays (millions)
Total kiwifruit trays grown11.2 17.1
( 34%)
SunGold trays (millions)6.2 8.9
( 30%)
SunGold yields - average per hectare9,333 11,998
( 22%)
Hayward trays (millions)5.0 8.1
( 38%)
Hayward yields - average per hectare6,7509,653
( 30%)
Post harvest operations
$151.1m Revenue – down 15% on pcp
$47.4m EBITDA – down 10% on pcp
Kiwifruit volumes down – well under capacity
−SunGold down 26%
−Hayward down 36%
KKP machine successfully commissioned
Oakside and Transcool capacity upgrades
completed
Automation integrated and successfully utilised
Operating margins achieved
Continued focus on quality
Packing, coolstoring and shipping kiwifruit and avocado for New Zealand orchard owners
15
H1 FY23H1 FY22FY22
$ millionsUnauditedUnaudited
Change
Audited
Revenue151.1 178.5
( 15%)
233.8
EBITDA47.4 52.9
( 10%)
59.0
EBIT37.0 43.7
( 15%)
41.2
Segment assets397.8 388.6
2%
360.4
EBITDA pre NZ IFRS 1642.9 48.9
( 12%)
52.8
Trays packed (millions)
SunGold19.9 26.7
( 26%)
Hayward and other varieties9.9 15.3
( 36%)
Total class 129.8 42.0
(29%)
Class 21.9 1.1
62%
Total packed31.7 43.1
( 27%)
SeekaFresh retail services operations
$9.8m Revenue – up 15% on pcp
$1.7m EBITDA – up 240% on pcp
Business rebuilding after Covid-19 disruptions
Margins achieved
Targeted profitable tropical fruit lines
Continued success expected
Marketing Class 2 kiwifruit and avocado, packing kiwiberry, selling imported fruit, and Kiwi Crush production
16
H1 FY23H1 FY22FY22
$ millionsUnauditedUnaudited
Change
Audited
Revenue9.8 8.5
15%
19.1
EBITDA1.7 0.5
240%
0.8
EBIT1.2 0.0
100%
( 0.8)
Segment assets15.2 23.6
( 36%)
11.5
EBITDA pre NZ IFRS 161.3 0.1
1200%
( 0.1)
Australian operations
$11.6m Revenue – down 19% on pcp
$0.9m EBITDA – down 65%
Australia similarly affected by adverse weather events
- Flooding in Shepparton
- Hail events
Continued developments in Jujube variety
$10m invested in developing orchards for future
growth – Kiwifruit, Nashi pears, Jujube
Growing, packing and retailing kiwifruit and other Australian produce on owned and leased orchards
17
H1 FY23H1 FY22FY22
NZD millionsUnauditedUnaudited
Change
Audited
Revenue11.6 14.4
( 19%)
14.0
EBITDA0.9 2.6
( 65%)
1.0
EBIT( 0.5)1.6
( 131%)
( 1.1)
Segment assets54.1 53.1
2%
54.5
EBITDA pre NZ IFRS 16( 0.2)1.5
( 113%)
( 1.1)
Forward focus
18
Forward focus
Delivering operational excellence
−Improved processes to ensure inventory continues to perform well onshore and in the markets
−Innovations leading to continuing harvest successes
Active cost management
−Leaner business will deliver $3m in cost savings per annum
−Captive insurance company structure implemented – set to save $1m+ annually on insurance costs
−Capital spending managed to remain within annual depreciation
Focus on bank debt reduction
−$201m Sustainability-Linked Loan facility, with two covenants waived for 2023, and covenants reset for 2024
−Continuing support from banking syndicate
Automation investments set to deliver capacity and performance gains
−Capacity to handle 50 million trays of kiwifruit
Invested in quality accommodation for RSE workers from the Pacific and Malaysia
−Complements local workforce to manage orchard and post harvest workload
Winter conditions and El Niño weather pattern support a rebound in kiwifruit yields in 2024
−Stark contrast to 2023 growing season
19
Contact
Michael Franks
Chief Executive
+64 21 356 516
20
For more information see www.seeka.co.nz or please call
Nicola Neilson
Chief Financial Officer
+64 21 841 606
Appendix
21
EBITDA
22
EBITDA before revaluations and impairments is considered by Seeka's Board to be a key
measure of performance and reflection of cash flow generation
H1 FY23H1 FY22FY22
NZD ($000s)UnauditedUnauditedChangeAudited
Net profit before tax13,635 30,065
( 55%)
7,593
Interest expense5,751 3,124 7,204
Lease interest expense2,408 2,207 4,289
EBIT21,794 35,396
( 38%)
19,086
Impairments
Impairment of PPE547 111 144
Impairment of biological assets--191
Impairment of intangible assets--681
Loss on revaluation of PPE959 --
Depreciation expense7,695 8,794 16,055
Lease depreciation expense5,250 4,824 9,516
Amortisation of intangible assets180 235 406
EBITDA before impairments and revaluations36,425 49,360
( 26%)
46,079
seeka.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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