Ann: SELECT HARVESTS LIMITED CROP AND MARKET UPDATE, page-6

Interesting that they are still forecasting a total crop of 29,630MT and final average sale price of A$6.64 per kg given the potential impact of these 4,000MT of almonds that are yet to reach their facility.

This compares to the last update they provided where they were estimating a crop of 30,000MT and an average sale price in the range of A$6.50 to A$6.80 per kg.

They mention costs being up, which was always expected given the fuel price increases along with other input costs rising however the additional harvesting and processing costs due to the wet conditions will add to that, but they do not quantify that, not even a range.

The higher crop but lower average sale price, if bears out, would still see a revenue increase in the order of 2 to 2.5% compared to last financial year. Although I very much expect a bigger year on year cost increase even with the lower water costs. I am hopeful EPS to be high single digits vs 12.7 last financial year.

SHV compares harvest conditions to be the most difficult in a decade. The last time conditions were bad was 2012 when large swathes of Victoria faced flood conditions, including the Mallee district. That was the first time in a long time that EPS was negative, but that year SHV had a total crop of 5,830MT from bearing acreage of 8,804 acres vs 22,886 this year and an average almond price of $5.08/kg.

The good news is left to the end of the announcement where they confirm what I've reported on from other sources that the Californian carryout is expected to be quite high however that is skewed very heavily to the lower grade almonds, manufacturing grades in SHV's words.

I am a bit wary of the 2022 crop figures that SHV has given us in this update, I believe the risk is to the downside that the remaining almonds will be questionable in terms of returns, although I am comfortable with their other information regarding the overall state of the market, including the US position. So short term risks but expect mid to long term to remain positive for SHV.