Today's AFRSelect Harvests’ $114m loss after almond falls....

Today's AFR

Select Harvests’ $114m loss after almond falls. Michael Bleby

Almond producer Select Harvests swung to a $114.7 million loss for the year to June as it sold smaller volumes at lower prices.But it sought to reassure investors that performance would improve this year because of lower production in the US, the world’s-largest market, which would push prices back up.

Select Harvests suffered a 30 per cent decline in the 2023 crop to 19,771 tonnes as cooler and wetter conditions in the country’s third year of La Nin ›a weather patterns hit all growing regions and weaker second-half pricing resulted in a year-average crop price of $6.42 per kilogram – $1.03 below the 2023 crop price the company estimated in the first half.

Australia’s second-largest almond producer also incurred $50 million in write-downs of 2022 crop inventory and goodwill in the year, which pulled its earnings into loss from a $4.8 million net profit in 2022.

After two ‘‘challenging’’ years, Select Harvests was well-placed to benefit from improving global conditions and would start its 2024 marketing campaign early in the new year to make the most of recovering prices, managing director David Surveyor said.‘‘The forecast of warmer, drier conditions leading into our harvest period and likely improved crop quality profile, combined with a return to long-term normalised crop production volumes, is welcome and will further improve that position,’’ he said.

A wave of institutional investment into horticultural assets such as nut farms by investors seeking higher-yielding assets has been followed by cooler and wetter conditions of the past couple of years, which hit producers and their landlords across the board.

Select Harvests and Rural Funds Group warned earlier this year that poor conditions would hit earnings.But Select Harvests said on Friday its total 2023 crop was 2271 tonnes up on the estimate of 17,500 tonnes it made at the end of the first half. Its shares closed down 10.5 per cent at $3.91.