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- Fruit, nuts and sugar cane farmer Crookes Brothers said it posted an almost R200 million loss in 2023, from a profit of almost R79 million in 2022.
- Depressed fruit prices in Europe as well as pressure on macadamia prices contributed the most to the fall, while it also had to contend with higher costs.
- The group is in the process of selling its fruit orchards in the Western Cape, hinting it may be looking to sell its macadamia operations as well.
- For more financial news, go to the News24 Business front page.
Agriculture group Crookes Brothers said on Thursday it swung into an almost R200 million loss in its year to end March, hit by a downturn in the prices of bananas, deciduous fruit, and notably, a bad outlook for macadamias.
The group said it also expects to conclude the R200 million sale of its three apple and pear farms in the Western Cape by the end of the year, with the fallout from Russia's invasion of Ukraine dealing another blow to a part of its business that has underperformed for years.
Crookes Brothers, which announced the sale in May, said on Thursday the deciduous fruit business, which is the Grabouw region, swung into R24.4 million operating loss in its year to end-March, from a profit of R16 million previously.
Russia's invasion of Ukraine has meant fruit destined for that market has instead been rerouted to Europe, depressing prices, while at the same time it had to contend with record chemical, fertiliser and packing costs.
"Attempts to pass on some of our increased farming input and shipping costs were strongly resisted, particularly by the major UK supermarkets," the group said.
Valued at under R500 million on the JSE, Crookes Brothers first listed in 1948 and has agricultural operations in KwaZulu-Natal, Mpumalanga and the Western Cape, as well as in Eswatini, Zambia and Mozambique. As of 2022, it employed about 1 000 permanent staff, and more than 3 000 when including seasonal workers, and specialises in the production of sugar cane, bananas, deciduous fruit and macadamias.
Deciduous fruit contributed just under a tenth of its total revenue in its 2023, with sugar contributing almost 60%, bananas almost a fifth, and macadamias just under 5%. It also has property interests.
During 2023, the group also had to contend with a downturn in macadamia and banana prices as well, with the banana division reporting an operating loss of R12.2 million, while the loss from macadamias surged to almost R167 million, from almost R4 million a year before.
Marketing reports have indicated that China’s years of heavy investment in its own macadamia plantations have successfully reduced their dependence on imports from other countries, it said, and with no definitive price recovery in sight, the group wrote down its assets by R93 million.
"The board is reviewing the business to assess ways in which to unlock value for shareholders and urges caution in trading in the company’s shares during this period," it said.
Net debt increased by 72% to R318.5 million, while finance costs 71% to R44.6 million. Shares in Crookes Brothers were unchanged on Friday but have fallen a fifth in the past year. Click here for details of its share as well as other info.
