Seeka Limited Analysis

Overview

Seeka is an integrated horticultural and produce company that grows, processes, distributes and markets high quality produce to world markets. An international business based in New Zealand focused on orchard-to-market excellence.

Seeka's core business is kiwifruit and it is a key supplier of New Zealand fruit to the global kiwifruit trade, via marketer Zespri, with around 21% market share. Seeka has invested capital to increase supply and processing capabilities as the industry anticipates growth with new gold kiwifruit variety.

Seeka continues to expand its product portfolio and capture value in emerging markets such as avocados while growing its geographical reach - now operating in Australia and Northland in addition to the Hawkes Bay, Bay of Plenty and the Coromandel. Seeka has a dominant market share with its Australian grown kiwifruit being supplied to local and export markets and nashi supplied to the local market.

Seeka provides an investment entry point to New Zealand kiwifruit and avocados and is poised for further growth.

Performance

The following information was extracted from Seeka Limited's Full Year results, released on 28 February 2024:

Listed New Zealand produce handler Seeka Limited, with operations in New Zealand and Australia, has today reported its audited results for the year ended 31 December 2023. Loss before tax of $21.0 million is in line with the previously announced guidance of $20 million to $25 million loss before tax.

-$48.7 million gross profit — down 29% on FY22's $68.3m

-$26.0 million EBITDA — down 44% on FY22's $46.1m

-($14.5) million net loss after tax — down from $6.5m net profit FY22

"The 2023 harvest was difficult right across the horticultural sector, as a warm wet winter, cyclones and hail significantly impacted

orchards in New Zealand and Australia", says Seeka chief executive Michael Franks.

"Yields were down across the industry, with Seeka only handling 30 million trays of class 1 New Zealand kiwifruit in 2023, compared

with 42 million in 2022.

"While 2023 volumes were materially down, Seeka’s operational performance between the orchard and point of sale was excellent.

More than 99% of the kiwifruit we packed for our growers was delivered on time and in spec to the marketer Zespri, and the quality of

our fruit supplied to the international consumer was the best in the industry.

"The large drop in kiwifruit volumes, however, reduced Seeka's revenue for the year to $301 million, down from $348 million in 2022. This contributed to a full year loss of $14.5 million after tax in 2023, compared to a $6.5 million net profit in 2022.