T&G Global says its annual profit will more than halve this year after cheaper tomatoes and a weather-affected grape harvest in Peru dented earnings.
Net profit will be $8-10 million this calendar year, down from $22.6 million in 2017, it said in a statement. Lower tomato prices affected T&G’s covered crops unit while its Peru grapes division dealt with a smaller harvest, it said.
The company acknowledged unusually low prices for its covered crops business at the half-year update.
“While the 2018 forecast is down on the 2017 result, the directors expect considerable improvement in 2019, when the benefits of recent operational efficiency and quality improvement initiatives are realised,” chief executive Gareth Edgecombe said.
T&G has turned its focus to growing its core businesses, which led it to divest several non-core businesses and investments during the latest period. That included the sale of ENZAFoods to Cedenco Foods New Zealand and the sale of its Kerikeri-based kiwifruit orchards, post-harvest facilities and business assets to Seeka.
T&G’s first-half result included a $2 million loss from discontinued operations, compared to a year-earlier profit of $1.5 million from those businesses. The discontinued units contributed a loss of $17.6 million in calendar 2017.
The shares, of which Germany’s BayWa owns 74 percent, were unchanged at $3.03, having declined 8.2 percent so far this year.
T&G will announce its annual result on Feb. 27.