Select Harvests posts $17 million profit

Almond giant Select Harvests has recorded a half-year profit of more than $17 million despite a persistent drought and coronavirus disruptions to global supply chains.

Select Harvests’ managing director Paul Thompson expects the almond company to harvest a large crop of 22,600 metric tonnes for the 2020 season.

ALMOND producer Select Harvests has posted a net first-half profit of $17.4 million despite the impacts of drought and supply chain disruptions triggered by coronavirus.

Australia’s second largest almond grower and processor said it was estimating a “high quality” 2020 crop of 22,600 metric tonnes, almost identical to last year’s large harvest of 22,690 metric tonnes.

Select Harvests managing director Paul Thompson said the 2020 growing season had been excellent in all regions.

“The first half has delivered a good result considering the challenges of the drought and the disruption to the supply chain caused by COVID-19.

“Continued investment in our horticultural staff and practices, infrastructure and maturing orchards enabled the company to achieve another year of above industry standard yield,” Mr Thompson said.

He said global demand for almonds remained strong.

The company estimates it will receive $8.20 a kilogram for its 2020 crop, down from $8.60 for its 2019 crop due to predictions of a record almond crop in the US to be harvested in August, which will soften global almond prices.

Select Harvests’ negative half-year operating cashflow of $32.2 million is in line with expectations as the period corresponds to the crop’s growth phase and capital intensive harvest.

Excluding the at-times exorbitant price of water, production costs also increased, with horticultural costs per kilogram up 7 per cent due to the maturing profile of Select Harvests’ orchards.

Water costs for the 12-months were up $9.5 million compared to the same period last year, representing 50 per cent of the company’s growing costs.

The board has declared a fully-franked dividend of 9 cents a share.

Mr Thompson said the first half of 2020 has delivered a strong operating result on the back of a good crop.

“Our tree health remains good. (And) current weather forecasts, water market conditions and storage levels should see a significant drop in the price of annual water allocations.”