Select Harvests (ASX: SHV) has reported its annual result for the year to 30 September 2019, sending the share price up 11% in early trading.
Select Harvests describes itself as a fully integrated almond business consisting of orchards (owned, leased, joint venture and managed), primary processing (hulling & shelling), secondary processing (blanching, roasting, slicing, dicing, meal), trading and consumer products (it provides the almonds for Lucky, Sunsol, Soland, NuVitality, Renshaw & Allinga Farms, as well as providing retail brands.
Select Harvests Reports Its FY19 Result
The almond business reported its full year result, but it has changed its reporting period to September 2019, so its comparison period is the year to June 2019.
Select Harvests reported that its total revenue increased by 42% to $298.5 million. Almond volumes increased by 44.5% to 22,690MT and the almond price rose by 6.8% to $8.60.
The nut company’s EBITDA increased by 84.1% to $95.2 million (click here to learn what EBITDA means).
Depreciation and amortisation only increased by 10.1%, which allowed total EBIT to rise by 129.5% to $80.1 million. Almond division EBIT grew by 132.2% to $82.2 million. The Food division saw flat EBIT of $5 million and corporate costs increased 29.1% to $7.1 million because of the JDE Food Division implementation.
Select Harvest also reported that it generated operating cashflow of $80.3 million, an improvement of $62 million.
The net profit increased by 159.8% to $53 million as a result of the above improved total revenue and efficiencies.
Select Harvests Dividend
Select Harvest’s Board has declared a final dividend of 20 cents per share, adding to the 12 cents per share interim dividend.
Select Harvest Management Comments
Select Harvests Managing Director Paul Thompson said of the increased crop and profit, “This is a result of excellent growing and harvest conditions, increased production from our maturing orchard portfolio and the benefits from our investments in risk mitigation such as frost fans. Recent investment in additional sorting technology at the Carina West processing facility has also improved both productivity and quality levels.”
Outlook
The company is aiming to decrease its water usage by 8% without impacting yield, it has largely acquired its full 2020 crop water requirements.
Select Harvests thinks the almond production will incrementally increase over the next three years whilst maintaining yields above industry average.
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