Difficult weather conditions failed to make much of a dent in Chinese orange producer Asian Citrus’ (ACHL) output for the year but the company faced more of a challenge from the slowing Chinese economy and the lower prices it achieved.
Total orange production for the year to June rose by 12 per cent to 243,421 tonnes but sale prices eased by 1.9 per cent. Margins in the Belhai fruit processing and juicing business were also hit by lower average selling prices for pineapple concentrate and lower demand from Europe. Overall revenues grew by 25.7 per cent but headline profits dipped by 27.8 per cent to £75.5m.
Orange output is expected to rise again this year as recently planted trees begin to bear fruit, but price rises may be difficult to achieve again due to the weakening Chinese domestic economy. Nonetheless, the company is cash rich - dividends rose by 20 per cent and a share buyback scheme in underway. At the end of June, the company had net cash of £234m.
