Interim
Report
2022
1
Contents
Chair and CEO review | 2 - 3 |
Financials | |
Income statement | 4 |
Statement of comprehensive income | 5 |
Statement of changes in equity | 6 - 7 |
Balance sheet | 8 - 9 |
Statement of cash flows | 10 - 12 |
Notes to the financial statements | 13 - 25 |
Chair and CEO review
Kia ora,
In the first half of 2022, in spite of the increasingly volatile and complex environment, we continued to make solid progress in creating a vibrant and strong business for future generations.
Thanks to this incredible mahi, we continued to safely pick, pack, deliver and sell fresh produce nationwide, ensuring fruit and vegetables remained on shelves across the country. Following the reopening of the Pacific Islands to international tourists, it has been pleasing to see the increased demand from both our Fijian domestic and our Pacific Island export businesses. With a new leadership team, our T&G Fresh business has stabilised and has a clear strategy for growth.
Progress on delivering our strategy
For 125 years, we have been growing healthier futures for our people, growers, communities, nation and consumers around the world. This legacy is what drives us, and over the last four
After having identified berries and table grapes as two emerging categories, we are now entirely focused on establishing a vertical berries category. Despite making good progress in table grapes, we have not been able to secure a strong competitive advantage. Going forward, table grapes will remain a profitable traded category for us. This year, as part of building out our berries category, we invested in a new joint venture blueberry farm in Australia and have begun moving new blueberry varieties to testing partners in Europe.
As part of our continued business transformation, we have begun a multi-year digital transformation programme to improve our business processes and future-proof the way we work, which will see us move to a new enterprise resource planning system.
As part of this, in June, we signed Aotearoa New Zealand's first Sustainability-Linked Loan in the horticulture sector, refinancing $180 million and committing to three ambitious targets. This will see us decarbonise our business, develop plans to assist in adapting to a changing climate and help build thriving local communities.
Looking ahead
As we continue to navigate our way through a complex and challenging environment, we remain absolutely focused on delivering our long-term strategy. We have a clear pathway for significant future growth and improved financial performance, and as a team, we're making great progress towards this. By focusing on what's in our control and harnessing our drive, resilience and teamwork, we will create a strong and sustainable business for future generations to take forth.
Globally, COVID-19 continues to disrupt markets and supply chains, making it challenging for exporters to get fresh produce to customers and consumers on time. At the same time, there's growing inflationary pressure, rising costs, a tight labour market - all against a backdrop of increasing frequency of adverse weather events.
This made it a tough start to the year, and our results do not reflect the tremendous effort our team put in to keep each other safe and proactively tackle the challenges, while staying firmly focused on delivering our long- term strategy.
Performance
For the first six months of 2022, total revenue for the Group remained largely constant, down from $652.1 million to $645.5 million. Operating profit increased 37.6%, from $10.9 million to $15.0 million this year, and profit before income tax increased 52.9%, from $5.1 million in the prior year, to $7.8 million.
Leading into this year's apple harvest, every effort was put in to maximising our crop and ensuring we had enough labour to harvest our premium fruit. Innovative local recruitment campaigns and incentive programmes, together with the return of many of our Recognised Seasonal Employer (RSE) whānau, positioned us well. Despite this, the unfortunate timing of the heavy rain at the start of the Hawke's Bay harvest extended the harvesting window of our premium apples beyond the optimum period. This, together with disruptions in global shipping schedules and reduced visits to Nelson, led to some quality issues and the late arrival into several markets, including Asia.
Our team worked hard to get ahead of supply chain challenges, partnering with Zespri and other horticultural exporters to charter vessels to the United States, and re-routing Nelson shipments
to other ports in Aotearoa New Zealand. Naturally, this came with higher costs.
Globally, there's significant consumer demand for our premium brands, however in the short-term demand is being affected by various macroeconomic and geopolitical forces, as well as COVID-19. Lockdowns in China made it difficult to move fresh produce in and around the country, with sales in wholesale, retail and foodservice channels affected. In many markets, the increasing cost of living is altering buying behaviour and confidence, and in Europe, the Russia-Ukraine conflict has led to a surplus of commodity apples and extensive pricing pressure.
These factors contributed to a decrease in revenue for our Apples business, from $421 million in 2021, to $401 million this year.
Our T&G Fresh business had a strong start to the year, although labour constraints and higher associated costs impacted its performance. As COVID-19 spread extensively across Aotearoa New Zealand in March, many of our office-based team stepped in to support our front-line operational teams as people isolated and took care of themselves and their families.
years we have re-purposed $300 million through property and orchard sales to reinvest in creating a future-fit, strong and sustainable business for the next generation.
Announced in late 2021, our new state-of-the-art automated packhouse in Hawke's Bay is on track, with the first stage set to be operational for the 2023 apple season. The packhouse will deliver significant efficiencies and accommodate increasing volumes of Envy™ and other apple varieties. At the same time, we've continued making progress on our future-proofed orchard optimisation and improvement plans.
In July, we completed the second sale to FarmRight, the New Zealand Superannuation Fund's rural investment manager, with the proceeds of this 40-hectare sale helping further fund our growth strategy.
T&G Global Chair Benedikt Mangold
(left) and Chief Executive Officer
Gareth Edgecombe (right)
Critical to the long-term sustainability of our business is our ability to embrace sustainable practices and meet global consumer needs.
Benedikt Mangold
Chair
Gareth Edgecombe
Chief Executive Officer
2 | 3 |
Income statement
For the six months ended 30 June 2022
NOTES | Unaudited | Unaudited | Audited | |
6 months to | 6 months to | 12 months to | ||
30 Jun 2022 | 30 Jun 2021 | 31 Dec 2021 | ||
$'000 | $'000 | $'000 | ||
Revenue from contracts with customers | 3 | 645,482 | 652,063 | 1,365,413 |
Other operating income | 18,730 | 3,963 | 10,861 | |
Purchases, raw materials and consumables used | (480,545) | (479,069) | (1,007,737) | |
Employee benefits expenses | (97,727) | (93,400) | (175,775) | |
Depreciation and amortisation expenses | (27,481) | (25,655) | (52,645) | |
Other operating expenses | (43,435) | (46,998) | (123,230) | |
Operating profit | 15,024 | 10,904 | 16,887 | |
Financing income | 1,018 | 699 | 1,234 | |
Financing expenses | (9,275) | (7,491) | (16,866) | |
Share of loss from joint ventures | 9 | - | - | (114) |
Share of profit from associates | 9 | 1,014 | 962 | 2,139 |
Other income | 17 | - | 7,384 | |
Other expenses | - | - | (866) | |
Profit before income tax | 7,798 | 5,074 | 9,798 | |
Income tax (expense) / credit | 4 | (2,049) | (1,658) | 3,754 |
Profit after income tax | 5,749 | 3,416 | 13,552 | |
Attributable to: | ||||
Equity holders of the Parent | 2,928 | 716 | 8,876 | |
Non-controlling interests | 2,821 | 2,700 | 4,676 | |
Profit for the period | 5,749 | 3,416 | 13,552 | |
Earnings per share (in cents) | ||||
Basic and diluted earnings | 2.4 | 0.6 | 7.2 | |
Statement of comprehensive income
For the six months ended 30 June 2022
NOTES | Unaudited | Unaudited | Audited |
6 months to | 6 months to | 12 months to | |
30 Jun 2022 | 30 Jun 2021 | 31 Dec 2021 | |
$'000 | $'000 | $'000 | |
Profit for the period | 5,749 | 3,416 | 13,552 |
Other comprehensive income | |||
Items that will not be reclassified subsequently to profit or loss: | |||
(Loss) / gain on revaluation of property, plant and equipment: | |||
Held by subsidiaries of the Group | (444) | - | 67,658 |
Deferred tax effect on revaluation of property, plant and equipment | - | - | (12,961) |
Deferred tax effect on sale of property, plant and equipment | - | - | 5,977 |
(444) | - | 60,674 | |
Items that may be reclassified subsequently to profit or loss: | |||
Exchange differences on translation of foreign operations | 4,733 | 1,708 | 2,672 |
Cash flow hedges: | |||
Fair value loss, net of tax | (18,672) | (7,350) | (13,448) |
Reclassification of net change in fair value to profit or loss | 3 | 876 | 2,602 |
(13,936) | (4,766) | (8,174) | |
Other comprehensive (expense) / income for the period | (14,380) | (4,766) | 52,500 |
Total comprehensive (expense) / income for the period | (8,631) | (1,350) | 66,052 |
Total comprehensive (expense) / income for the period is attributable to: | |||
Equity holders of the Parent | (11,599) | (4,497) | 60,822 |
Non-controlling interests | 2,968 | 3,147 | 5,230 |
(8,631) | (1,350) | 66,052 | |
4 | The accompanying notes form an integral part of these interim financial statements. | The accompanying notes form an integral part of these interim financial statements. | 5 |
Statement of changes in equity
For the six months ended 30 June 2022
2022
NOTES | Unaudited | ||||||
Revaluation | Non- | ||||||
Share | and other | Retained | controlling | Total | |||
capital | reserves | earnings | Total | interests | equity | ||
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||
Balance at 1 January 2022 | 176,357 | 113,112 | 270,607 | 560,076 | 13,528 | 573,604 | |
Profit for the period | - | - | 2,928 | 2,928 | 2,821 | 5,749 | |
Other comprehensive income / (expense) | |||||||
Revaluation of property, plant and equipment | - | (444) | - | (444) | - | (444) | |
Exchange differences on translation of foreign | - | 4,586 | - | 4,586 | 147 | 4,733 | |
operations | |||||||
Movement in cash flow hedge reserve | - | (18,669) | - | (18,669) | - | (18,669) | |
Total other comprehensive (expense) / income | - | (14,527) | - | (14,527) | 147 | (14,380) | |
Transactions with owners | |||||||
Dividends | 7 | - | - | - | - | (4,666) | (4,666) |
Movement in equity from sale of shares in | 8 | - | - | - | - | 3,342 | 3,342 |
subsidiary | |||||||
Total transactions with owners | - | - | - | - | (1,324) | (1,324) | |
Balance at 30 June 2022 | 176,357 | 98,585 | 273,535 | 548,477 | 15,172 | 563,649 | |
2021
NOTES | Unaudited | ||||||
Revaluation | Non- | ||||||
Share | and other | Retained | controlling | Total | |||
capital | reserves | earnings | Total | interests | equity | ||
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||
Balance at 1 January 2021 | 176,357 | 113,289 | 216,961 | 506,607 | 13,147 | 519,754 | |
Profit for the period | - | - | 716 | 716 | 2,700 | 3,416 | |
Other comprehensive income / (expense) | |||||||
Exchange differences on translation of foreign | - | 1,257 | - | 1,257 | 451 | 1,708 | |
operations | |||||||
Movement in cash flow hedge reserve | - | (6,470) | - | (6,470) | (4) | (6,474) | |
Total other comprehensive (expense) / income | - | (5,213) | - | (5,213) | 447 | (4,766) | |
Transactions with owners | |||||||
Dividends | 7 | - | - | - | - | (3,483) | (3,483) |
Total transactions with owners | - | - | - | - | (3,483) | (3,483) | |
- | - | ||||||
Balance at 30 June 2021 | 176,357 | 108,076 | 217,677 | 502,110 | 12,811 | 514,921 | |
6 | The accompanying notes form an integral part of these interim financial statements. | The accompanying notes form an integral part of these interim financial statements. | 7 |
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T&G Global Limited published this content on 04 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 August 2022 21:02:59 UTC.