Almond grower bullish despite profit slump

Almond grower Select Harvests has maintained bullish expectations on demand growth despite a plunge in half year profit.

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The company has announced it will buy South Australia-based Jubilee Almond Orchards and a 22 per cent stake in almond hulling and shelling facility Laragon Processing, for a total $26.5 million.

The acquisitions would increase its volumes by 1,400 tonnes annually, it said.

Select Harvests made a net profit of $11.6 million in the six months to December 31, a drop of 51 per cent from a year earlier, on the back of lower than expected almond prices.

“Current earnings momentum remains in line with our expectations,” managing director Paul Thompson said.

“Select Harvests is structured and managed to withstand and capitalise on short term commodity price and currency fluctuations.”

The company is one of Australia’s largest nut growers, and expects to produce between 15,750 and 16,250 tonnes of almonds in 2016/17.

That is expected to increase to 20,000 tonnes by 2019/20 under its expansion plan.

The company said the 2017 harvest is running two to three weeks behind schedule due to milder spring and summer weather, but growing conditions overall have been favourable.

It said prices have stabilised and increased from the lows experienced in the six months to December.

The nut grower also operates a food division marketing its Lucky, Sunsol and Soland brands, and has signed a distribution agreement in China for its consumer packaged goods that is expected to commence in March.

Select Harvest shares were down 15 cents, or 2.8 per cent, at $5.29 at 1310 AEDT.

WEAK PRICES HIT PROFIT AT SELECT HARVESTS

* Half year net profit down 51 pct to $11.6m

* Revenue down 24 pct to $126.5m

* Dividend down 11 cents to 10 cents, fully franked