T&G Global is forecasting a loss of up to $34 million for the 2023 financial year, following February’s Cyclone Gabrielle, the company said in a market announcement to the New Zealand stock exchange.
“A cost-reduction programme has been implemented in response to the cyclone and is expected to result in material cost savings in 2024 and beyond,” chief executive officer Gareth Edgecombe said.
The company posted a loss of $3.3m in calendar 2022.
While most of the owned and leased T&G orchards were not affected by the cyclone, four were severely impacted. This represented about 13% of T&G’s planted hectares in Hawke’s Bay.
About another 22% of the planted hectares in Hawke’s Bay were affected and are expected to have reduced capacity for up to three years.
Edgecombe said the orchards in Hawke’s Bay need significant remediation, including clean-up, removal of silt and write-down of trees and planting structures, and the company will continue to work with insurers to assess the recovery.
T&G’s New Zealand apple crop has now been fully harvested and overall NZ supply volumes are down 19% on last year.
Despite this, he said, 14% of the crop had sold, and pricing appears strong. T&G will optimise fast-tracking air shipments to Asia.
A new packhouse in Whakatu in Hawke’s Bay is fully operational.
Edgecombe said the board remains confident in T&G’s strategy, particularly of its recent significant investments in orchard development, despite the effects of Cyclone Gabrielle.