Select Harvests suffers frost damage at almond plantations

Select Harvests is waiting to assess damage from October frosts on its NSW almond plantations.

The almond company’s managing director Paul Thompson will tell today’s annual general meeting of shareholders that it was still too early to define what impact the frosts had on its plantations during the critical pollination period in NSW and other states.

“Despite our risk mitigation technology of frost fans and sprinklers, post-pollination frost events have affected our NSW orchards and some orchards in the other regions,” Mr Thompson said in a statement to the Australian Securities Exchange.

If there was no frost impact, Select Harvests was expecting an almond harvest of 15,800 tonnes based on its current planted area, trees in production and average maturity yields.

In 2017, the company harvested 14,100 tonnes of nuts, well short of expectations.

“The wet spring and milder summer affected our ability to fertigate the crop and the absence of stress events prevented the natural selection process of the trees aborting weaker fruit,” Mr Thompson said.

“This resulted in a reduced crop and an over-investment in fertigation.”

Two key projects — an electricity cogeneration plant and a parboil facility — blew out in costs and behind scheduled launching.

These events were the major contributors to a net profit after tax of $9.2 million and prompted the company’s board to forego a final dividend for 2016-17.

Select Harvests’ chairman Michael Iwaniw said the lower profit result and earnings a share of 12.6 cents were “simply well short of where we believe we should be”.

Mr Iwaniw said a successful capital raising in October had reduced debt and placed the company in a very strong financial position.

He said a recent bank valuation of the company’s assets showed they were worth more than their book value.

Mr Iwaniw said Select Harvests’ orchards had significant growth potential, with 20 per cent of plantings yet to reach productive capacity.

“Over the next two years, the company’s annual almond production will increase by approximately 2000 tonnes,” he said.

“Over the next five years, production will increase by approximately 7000 tonnes.”

Mr Thompson said much of Select Harvests’ capital investment had already occurred.

“The majority of ongoing capital investment is in tree development and harvest equipment to support the larger crop,” he said.

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