This article is from the Australian Property Journal archive
LISTED agribusiness Select Harvests has acquired the Jubilee Almond Orchards in South Australia for $26.5 million despite posting a lower profit result.
Australia’s largest almonds producer also announced a net profit after of $11.6 million for the six months to December 31, down from $23.9 million in the previous corresponding period.
Managing director Paul Thompson said this result is in line with expectations and the strategic goals set out in the Strategy to 2018.
The 1H17 EBIT of $15.6 million was down from $25.0 million in the pcp.
Thompson said the main driver of this reduced EBIT arises from the almond price assumed for the crop at the time of the valuation. The pricing assumption for the 2016 crop at the half year result last year was $9.00/kg, and it was revised downwards at the 30 June 2016 full year result to $8.08/kg.
“During the past eighteen months the almond price has been volatile and influenced by a range of factors: USD almond prices, crop quality, forecast Californian almond production and the AUD/USD exchange rate. We have advised the market of the prevailing conditions on a regular basis. The price has now stabilized and increased from the lows experience in the second half of 2016.
“On a positive note increased volumes, productivity improvements, cost savings and additional revenue streams from new almond orchard developments have improved our profitability,” he added.
Select Harvests has announced an interim dividend of 10 cents per share down from 21cps.
The Jubilee Almond Orchards comprises 1,147 acres of mature and developing almond trees (792 acres bearing and 355 acres non-bearing), 1,335 ML of high security water entitlements and a shareholding in Laragon Pty Ltd (an almond processor). At full maturity these orchards have the potential to produce in excess of 1,400MT of almonds.
Thompson said this will be highly accretive as this is a bolt-on to existing business.
“The transaction is subject to a final grower/shareholder vote and is expected to settle during the last quarter of the FY17 financial year. This acquisition will be funded from the balance sheet using bank facilities,” Thompson concluded.
Australian Property Journal
