![Last year's wet season drowned trees and notably reduced the national almond harvest. File photo. Last year's wet season drowned trees and notably reduced the national almond harvest. File photo.](/images/transform/v1/crop/frm/32XghFRykTWK8psrWNhdBMC/1b16407f-82ed-4509-873b-f12ec8516380.JPG/r0_110_4567_2935_w1200_h678_fmax.jpg)
It's been another tough - and unprofitable - year for the big name in Australia's almond growing and processing, Select Harvests.
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After taking a caning from flooding, cool weather, falling global prices, rising farm input costs and poor yields in 2022-23, Select posted a $114.7 million net loss after tax for the full year to September 30.
The Victorian, NSW and South Australian grower and nut exporter share price has subsequently crashed to a 20-year low.
Yield and global price prospects are, however, looking much better for the current, drier season, although a pollinating bee shortage and higher water pumping costs are on the radar.
The company will also ramp up processing operations at Carina West in North West Victoria by as much as 25 per cent taking in more tonnage from outside growers.
The recent 2022-23 harvest ended the third almond season in a row hindered by rainy La Nina weather setbacks.
It included the write-off of $4.1m in tree losses to orchard flooding along the Murray River a year ago.
Eventual yield's of 19,770 tonnes were actually better than anticipated six months ago, but still down almost a third on the previous year's volumes as cool, wet weather hurt almond growers everywhere.
Volumes were well below previous industry averages.
Better than expected
Global almond prices also took a dive below historical averages, despite positive earlier trends, resulting in a $74.5m loss in the crop's fair value and after it achieved an average price of $6.42 a kilogram - down about $1.03 on the prior year.
Although the crop's final value was helped by more volume than expected, it was undermined by poorer nut quality and a lack of long term orders from a global market also awash with lower grade US carryover stocks.
Crop costs were 23pc higher than 2022, principally driven by fertiliser costs spiking after Russia invaded Ukraine and Chinese supply limitations causing crop chemical shortages.
The damp season and harvest also caused a second year of higher than normal mechanical drying expenses.
The bad news has not been received well by investors, with Select Harvests' share price falling 7pc late last week and another 5.6pc on Monday, down from $4.37 to below $3.60 - its lowest point since early 2003.
The near-$115m statutory loss included about $50m in write downs of goodwill and inventory value and followed a slide in operating cash flow from $27m in 2021-22 to negative $8.2m.
However managing director, David Surveyor, who has had to endure a succession of seasonal disappointments since taking on the job early this year, said despite two challenging years, Select Harvest still considered itself "well placed".
![Select Harvest is increasing processing operations in North West Victoria to handle more tonnage from outside growers. File photo. Select Harvest is increasing processing operations in North West Victoria to handle more tonnage from outside growers. File photo.](/images/transform/v1/crop/frm/32XghFRykTWK8psrWNhdBMC/7712d0e0-91a4-49d6-8475-6e06be34ff50.JPG/r599_629_3706_2777_w1200_h678_fmax.jpg)
"Forecasts of warmer, drier conditions leading into our harvest period and the likely better crop quality, plus a return to normalised crop production volumes, will further improve that position," he said.
Almond prices had moved upwards since September as global markets gained clarity about a poor US season and harvest conditions for the 2023 crop.
"As the US crop gets processed and becomes available for sale, pricing is expected to rise further, particularly for higher grade material," Mr Surveyor said.
Australian Almond Board shipping figures showed national exports lifted 11pc over seven months to October 1, with exports to Europe, India and the Middle East rising, but Chinese buying subdued by lower quality.
Meanwhile, with its bank debt to equity ratio now at 46.2pc, the company was rolling out initiatives to increase its financial discipline and drive gains in profitability and cash.
Processing upgrades
More than 50 projects were on track to improve productivity, reduce bottlenecks and optimise high quality nut recovery at Carina West also lifting capacity to 40m tonnes a year.
Select Harvests was committed to deliver $15m in profits and $35m in cash from these initiatives.
"We have developed a strategy that focuses on us sourcing more almonds, increasing our processing capacity, achieving greater value for our almonds and assessing new growth opportunities," Mr Surveyor said.
"Our focus for 2023-24 is to maximise yield and quality from the 2024 crop, maximise price realisation, maintain tight cost control and improve cash realisation and velocity."