Global conditions squeeze Capespan profits

RAY SMUTS
CAPESPAN, South Africa’s major fruit export marketer, admits 2005 was one of its most challenging years as a host of factors impacted negatively on the group. Even though fruit results for the group were below expectation as South African fruit procurement languished, logistics and investments performed well, resulting in a “reasonable” after-tax profit of R44.1 million. In an overview of the year that was, Capespan chairman Dr Paul Cluver, MD Neil Oosthuizen and chief financial officer Andrew de Haast, say the persistence of a global oversupply of fruit and retailers increasing market share culminated in price deflation in most of the group’s international markets. “The continued strength of the rand, together with inflationary pressures at production level, has meant that farm gate returns have decreased dramatically over the year, placing continued strain on the financial viability of horticulture. Changing climatic conditions also have led to inconsistent quality and yields.”