One of the largest almond growers Select Harvest Limited (ASX: SHV) today released its presentation on ‘Credit Suisse – Food and Beverage Focus Day’.
Select Harvest Limited is an ASX-listed, fully integrated almond business consisting of orchards, primary processing, secondary processing and consumer products. Australia is well-known for its significant almond production worldwide and Select Harvest is positioned as Australia’s leading almond companies, supplying almonds internationally and domestically, to health food stores, supermarkets, other food manufacturers, retailers and the almond trade.
The Group has achieved a reduction in production costs on the back of improved horticultural practices and innovative technology. Its FY19 almond price forecast range is between A$8.40 – A$8.70/kg, with 70% of the estimate crop volume USD hedged.
The combination of a lower 2018 Californian crop and strong demand from China has had a positive impact on the Australian market. Australia’s almond export to China has been increased from 2% in Season 2017 to 20% in Season 2018 from March to January.
The favourable seasonal conditions have further helped the company to seize the underlying opportunities. Around 50% of the harvest is complete while the company’s 2019 harvest is progressing well for completion expected around the end of April. Select Harvest expects the limited U.S and Australian crop carry-over into 2019, driven by strong export demand.
With respect to processing update, the company told that 25% of the forecast crop has been processed to date and the new technology is resulting in high in-shell yield, improved quality and increased productivity. To date, the processed crop is 10% above expected industry benchmark volumes.
The water costs have also been offset as part of ongoing strategic water portfolio management with the help of volume leverage, cost control, high almond prices and additional hull and shell revenue. The smart irrigation practices drive orchard performance and allow remote monitoring and irrigation controls in place.
Among a wide range of advanced technology adoption by the company, Phytech’s sensors have been the highlight. These sensors on selected trees, continuously measure changes in trunk diameter which protect yield reducing stress by immediately alerting farmers on a mobile app and web platform.
The company has also adopted the use of robots and drones including a water and fertiliser management tool, Ceres Imaging, which allows the company to assess both medium and long term orchard trends as well as a snapshot in time. For precision agriculture and predictive data analytics, it has new automated QA system in place which leverages machine learning. In addition to reducing cost and increasing accuracy, this system known as Q cify has the ability to help the company set benchmark globally.
In the company’s 2019 operational priority list, continued zero harm and wellbeing remains the focus of Select Harvest followed by the aim to optimise the almond base and grow its brands.
SHV stock price edged up by 0.915% to last trade at $6.620 on 4 April 2019. Over the past 12 months, the stock has witnessed a positive performance change of 16.52% including an upsurge of 7.54% in the past three months.