Select Harvests Reports Bumper Crop For FY21
- 70 percent of 2021 crop committed at $6.25/kg - $6.75/kg, total production costs estimated at $5.56/kg in 1H FY20
- Firmer almond market prices at 31 August of $7.25/kg - $7.75/kg
- Strong global demand with 2022 almond crop progressing well, indicated by good tree health in all regions
Select Harvests Limited is a fully integrated almond business that supplies almonds domestically and internationally. Australia is a significant almond producer and Select is one of Australia’s largest almond producers. Australia and the US (specifically California) account for about 86 percent of global almond production. Select’s orchards are located in Victoria, New South Wales and Western Australia, while its primary processing facility is located in North-West Victoria.
Half-year results to March 2021
Net profit after tax for the 6 months to 31 March 2021 was $1.3 million, down 92.5 percent from $17.4 million, in the previous corresponding first half-year and $20 million in 1H FY19. This latest profit amount equates to earnings per share of 1.1 cents, compared to 19.3 cents in 1H FY20. No interim dividend was declared for 1H FY21. The result was negatively impacted by lower global almond prices during the period.
Although a sizeable 2021 almond crop volume of 28,250 MT was estimated, with 40 percent of the estimated crop processed, prices were soft at an anticipated $6.00/kg. This compares to $7.50/kg in the first half-year of 2020 and a recent high of $8.60/kg in FY19. Total almond production costs were well controlled at $5.56/kg in the March 2021 half-year.
Operating cash flow was $6.3 million, a significant turnaround from the corresponding previous reporting period of negative $22.9 million.
Net Debt (excluding finance lease liabilities)/Equity ratio at 31 March 2021 was 21.7 percent, compared 17.6 percent at March 2020.
Update on 2021 almond crop
The estimated crop size remains unchanged since the March 2021 half-year results announcement at 28,250 MT. With 80 percent of the crop processed, market pricing has firmed to $7.25/kg - $7.75/kg at 31 August. However, 70 percent of the 2021 crop is committed at prices between $6.25/kg and $6.75/kg.
Earnings are variable from year to year, and are sensitive to crop quality and yield, contract prices, production costs and the AUD/US FX rate.
COVID-19 restrictions are adding pressure to available global logistics, causing disruption to shipping programs, particularly to India and China.
Global demand for almonds is strong, despite increasing almond prices. The 2022 almond crop is progressing well as indicated by good tree health in all regions. The company is focused on factors within its control, such as almond volume, product quality and production costs, all of which are tracking favourably.