Produce exporter T&G Global has managed to lift its half year profit in the face of ongoing supply chain disruptions and challenging economic conditions.
T&G Global said it had partnered with other horticultural exporters to charter vessels to the United States, in an attempt to mitigate the effects of ongoing global shipping disruptions. Photo: Thomas Martinsen/ Unsplash
Key numbers for the six months ended June compared to a year ago:
- Net profit $5.7m vs $3.4m
- Revenue $645.5m vs $652.1m
- Underlying profit $15m vs $10.9m
- Net assets $563.6m vs $514.9m
T&G chief executive Gareth Edgecombe said the company had improved its financial results, despite it being a tough start to the year.
"We're operating in an increasingly volatile environment, with ongoing supply chain disruptions, growing inflationary pressure, rising costs, macroeconomic geopolitical events and Covid-19 continuing to affect some of our key markets."
He said the improved bottom line was due to the composition of the company's revenue over the half, fewer one-off costs, tighter cost control and better margins.
The company said it had had to contend with poor weather conditions, with heavy rain affecting the beginning of its Hawke's Bay harvest which extended the harvesting window "beyond the optimal period".
"This, together with disruptions in shipping schedules, led to some quality issues and the late arrival of fruit into several markets," Edgecombe said.
T&G attempted to mitigate these challenges by partnering with Kiwifruit exporter Zespri and other horticultural exporters to charter vessels to the United States, although this came at higher operating costs to the company.
T&G's interim report said global demand for its premium brands remained strong but short-term interest was being constrained 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 combined factors resulted in revenue in the company's core apple business falling to $401m, from $421m a year ago.
"As we continue to navigate our way through a complex and challenging environment, we remain absolutely focused on delivering our long-term strategy," the company said.