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Ann: FORECAST: SEK: Seeka updates the market

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    					SEK
    14/10/2015 12:16
    FORECAST
    PRICE SENSITIVE
    REL: 1216 HRS Seeka Kiwifruit Industries Limited
    
    FORECAST: SEK: Seeka updates the market
    
    14 October 2015
    Seeka updates the market on late fruit loss and updates guidance
    
    On 19 August, Seeka updated the market on its financial results for the six
    month period ended 30 June 2015, and provided an outlook for the remainder of
    the current year.  As we noted in the release, Seeka would not ordinarily
    give an outlook at that time, and would ordinarily give guidance in October
    when there was greater certainty over fruit prices, international markets and
    storage performance.  Seeka elected to give earlier guidance in this year, as
    it considered it prudent given the significant lift in earnings for the first
    six months of the financial year.
    
    The forecast provided a range for the lift in after tax earnings for the full
    year of between 30% and 40% on the previous financial year's Net Profit after
    Tax of $3.17m, excluding one off gains, any gain arising from accounting for
    the insurance proceeds from the Oakside fire, revaluation and impairments,
    and costs associated with acquisitions or disposals.
    
    Seeka committed to update the market should there be any material variation
    in the guidance.
    The 4 March 2015 fire at the company's Oakside facility has unexpectedly
    impacted fruit storage performance and for this reason, now that the fruit
    storage performance is better understood, it is appropriate to up-date the
    market.
    
    The guidance given in August relied on a number of variables including Zespri
    sales rates, fruit storage and fruit loss, and the Oakside building
    reinstatement insurance proceeds received to that date.
    
    However, Seeka advises that late season Hayward (green) kiwifruit storage is
    proving to be abnormally difficult, and fruit losses are higher than
    predicted in the forecast.   These losses financially affect Seeka as a
    grower and its post-harvest business.
    
    Seeka has investigated the cause of the losses and its current best
    information is that the cause is related to the Oakside fire and issues
    arising out of storage bins at the site.  Seeka believes the event to be
    covered by insurance, and is in discussions with its insurers over a claim
    for the loss on behalf of itself and its growers.
    
    Allowing for the expected accounting gain for the insurance proceeds from the
    Oakside building fire claim, and costs and losses associated with increased
    fruit loss, which remain subject to a separate insurance claim, Seeka
    continues to expect performance will exceed the 2014 financial year, but
    expects profit performance now to represent a 10% to 40% increase over that
    financial year, with the lower end of the range being the outcome if the
    costs associated with the fruit losses are uninsured.
    
    The Company advises that it will update Shareholders and Stakeholders on
    Wednesday 21 October at commencing at 3pm at The Stadium Lounge Baypark,
    Truman Lane Mount Maunganui.
    
    For further information please contact:
    Michael Franks Chief Executive 021356516
    Stuart McKinstry Chief Executive 0212215583
    End CA:00271722 For:SEK    Type:FORECAST   Time:2015-10-14 12:16:07
    				
 
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