SHV - Select Harvests

[divs4ever]

Cool reception of the production update today - closed down 3% and now almost at the level of the major lows of recent years. Below the 2020 CV19 low.
So much that can go wrong with an exporting agricultural company so doubt I would get in at any price.
Two guys from WiIsons opine that SHV is a neglected 'cyclical' that should pay a reward if patient. They say SHV's assets are worth more than it's price and they were referring to a $5.50 share price (closed today @ $4.09). Don't get that, as Commsec's book and tangible stats do not confirm - maybe they've done their own appraisal of current property values. It's almost like they are talking about another company. They mention California will be working through its prior production glut and that drought darkens Cal producers' future.
From elswhere, it was mentioned that SHV should benefit from free trade agreement with India (a big almond consumer)

Why we are bullish on these cyclical stocks

Heightened volatility continues to grip markets, but WAM Capital still sees opportunities in several corners of the market.

www.livewiremarkets.com

Not Held

Chart is All Data Quarterly intervals for perspective. To me it looks a risk of breaking the support of recent major lows.

View attachment 150506

i bought back in , in November ( this year ) cum. div. ( i also hold RFF , my preferred exposure )

am looking for sub $4 to add more

yes a LOT can go wrong , but a lot can go right especially when most of the rivals are in California, USA and you MIGHT get some FX tailwinds ,
counter-intuitive moves to announcements ( from memory ) used to be a trade-mark of this share ( maybe it's a leaky ship and maybe not ) i look to see if the price moves towards the target , that seems to work for me

bought as low as $$1.27 ( June 2012 ) and sold as high as $12.80 ( July 2015 )

IMO more a stock for an opportunistic investor than a trader , but still in the ASX top 300 so will attract some ETF and trader action

 

[JohnDe]

Opportunity knocking?

Another one of my Alerts going off at the ridiculously low price I set up months ago.

 

[divs4ever]

i have an order in , but not all that close ( still a few cents away )

good luck if you play here ( it CAN make big moves over a few years span )

 

[divs4ever]

given the roller-coaster moves in SHV in the past it is very likely i will rescue the investment cash when substantially in profit , say up around 200% , which will probably a long wait given current economic conditions

 

[The Triangle]

i have an order in , but not all that close ( still a few cents away )

good luck if you play here ( it CAN make big moves over a few years span )

Haven't seen it this cheap in a long time. Had this spreadsheet open from yesterday's pearl research and plugged in the SHV numbers for past 4 years (in 1,000s). Not liking what I see... 3 years of flatline revenue (Revenue was ~250 million in FY12... So they really haven't achieved a thing in a decade) and 4 years of cost growth, total expenditures higher than income, so they are using debt to finance/subsidize capital, and probably some of the leases. On top of that they obviously cannot pay the dividend from operating cashflow, so they're borrowing to pay a dividend... Now this is all fine if you trust the company to deliver on its strategy, grow, etc. etc. Or if you're investing in the cycle. But I said a few years ago I thought they needed to take onboard debt to increase profitability/revenue. Well... Looks like they've taken on debt to achieve SFA in my opinion.

On a related note I bought a bag of almonds a week ago and it was 65% off, can't remember the brand. Never seen almonds this cheap before. Think I'll stay out of SHV for a while myself, but I'll keep an eye on it.

 

[divs4ever]

share price down , yes

but P/E is high ( 79.45 ) D/E is high ( 72.6% ) for my liking , Div. yields low ( 0.5% ) and given the debt levels one would expect div. payout ratios to stay low while the debt is paid down .

BUT unlike several 'tech ' and BNPL stocks does make a profit ( some years ) so am calling this a 'safe-haven/growth stock ' thinking US rivals will struggle with increasing costs ( compared the SHV )

 

[divs4ever]

the order filled (@ $3.95 ) for better or worse

i hope this is not an omen that this Xmas will be nuts !

 

[divs4ever]

Record Low Almond Prices, But Medium-Term Signals Strong
Select Harvests Limited (‘SHV’ or ‘Company’) today provides a near and medium-term trading update.
Paul Thompson, Managing Director said “Challenging wet conditions for the 2022 crop harvest meant a
larger than expected portion of the crop has been negatively impacted, requiring a downgrade in quality.
At the same time global almond prices have continued to decline, impacting the value of product sold by
the Company since 30 September 2022 and the assumed value of the remaining 2022 crop on hand.”
2022 Crop Update
A detailed assessment of inventory on hand has been completed. The quality of the 2022 crop is the worst
the Company has experienced in the last ten years. The wet harvest required mechanical drying of a large
portion of the 2022 crop and consequently, a higher percentage of inventory is of manufacturing grade
quality.
Realised sales prices are in line with a weakened global market, particularly for lower grade almonds.
Based on current market conditions, the value of the remaining 15% of the crop on hand is correspondingly
reduced. This inventory has been revalued at the relevant lower pricing points or been written off.
The combination of the weather and world prices has reduced the 2022 crop fair value inventory sales
price from $6.80/kg (as disclosed in the FY2022 financial statements) to a forecasted $6.15 - $6.30/kg. This
price reduction and an inventory write off is expected to reduce the 2022 Crop Fair Value EBIT by $18M -
$22M.
Market Conditions and Outlook
Mr. Thompson addressed the medium term optimistically, saying “While global market pricing remains
at near historic lows there are positive signs emerging. The December shipments from the Californian
Almond Board position report and the November shipments from the Australian Almond Board position
report were strong.”
Buyers in the Indian and Middle Eastern markets are becoming increasingly active. Additionally, the
easing of Covid related lockdown measures in China has stimulated demand in this important market.
“The peak of the recent floods has passed. All our orchard operations are focused on our pre-harvest
programs. There was no significant damage from the floods, but some minor tree losses occurred due to
orchard inundation. The medium-term farming outlook is business as usual.”
Select Harvests Limited (ABN 87 000 721 380)
Level 3, Building 7 Botanicca Corporate Park
570-588 Swan Street Richmond VIC 3121 Australia
Telephone +61 3 9474 3544
www.selectharvests.com.au
As Agent for: Select Harvests Food Products Pty Ltd (ABN 17 058 752 846)
As Agent for: Kyndalyn Park Pty Ltd (ABN 76 006 360 194)
“We are planning to commence the 2023 crop harvest in February and the current harvest period
weather forecast is favorable.” Mr. Thompson said.
Balance Sheet
Despite the inventory reduction, the company is within its current banking limits. Debt to equity levels at
1H FY2023 is expected to be approximately 35% (based on market value of assets gearing would be
approximately 26%).
As a result of the lower realised sale price, inventory write down and current market conditions, it is likely
that Select Harvests’ goodwill will be impaired and, if this transpires, a non-cash write-off of approximately
$26M is expected to be recorded in the 1H FY2023 financial statements.
Mr. Thompson said the Company has a well capitalised and flexible Balance Sheet and added, “The
previously advised sale of the Mountview orchard is progressing but was delayed due to the recent floods
in the Riverina. The Company also has a portfolio of permanent water rights with a current market value of
over $100m which adds to the Company’s financing flexibility.”
This announcement has been approved by the Board of SHV.

DYOR

i hold SHV ( having bought in recently )

careful here the share price can really more around , it is also influenced by the US-AUS dollar exchange rate , but rising costs should be the near-term worry

i am looking to add sub $3.50

 

[JohnDe]

Record Low Almond Prices, But Medium-Term Signals Strong
Select Harvests Limited (‘SHV’ or ‘Company’) today provides a near and medium-term trading update.
Paul Thompson, Managing Director said “Challenging wet conditions for the 2022 crop harvest meant a
larger than expected portion of the crop has been negatively impacted, requiring a downgrade in quality.
At the same time global almond prices have continued to decline, impacting the value of product sold by
the Company since 30 September 2022 and the assumed value of the remaining 2022 crop on hand.”
2022 Crop Update
A detailed assessment of inventory on hand has been completed. The quality of the 2022 crop is the worst
the Company has experienced in the last ten years. The wet harvest required mechanical drying of a large
portion of the 2022 crop and consequently, a higher percentage of inventory is of manufacturing grade
quality.
Realised sales prices are in line with a weakened global market, particularly for lower grade almonds.
Based on current market conditions, the value of the remaining 15% of the crop on hand is correspondingly
reduced. This inventory has been revalued at the relevant lower pricing points or been written off.
The combination of the weather and world prices has reduced the 2022 crop fair value inventory sales
price from $6.80/kg (as disclosed in the FY2022 financial statements) to a forecasted $6.15 - $6.30/kg. This
price reduction and an inventory write off is expected to reduce the 2022 Crop Fair Value EBIT by $18M -
$22M.
Market Conditions and Outlook
Mr. Thompson addressed the medium term optimistically, saying “While global market pricing remains
at near historic lows there are positive signs emerging. The December shipments from the Californian
Almond Board position report and the November shipments from the Australian Almond Board position
report were strong.”
Buyers in the Indian and Middle Eastern markets are becoming increasingly active. Additionally, the
easing of Covid related lockdown measures in China has stimulated demand in this important market.
“The peak of the recent floods has passed. All our orchard operations are focused on our pre-harvest
programs. There was no significant damage from the floods, but some minor tree losses occurred due to
orchard inundation. The medium-term farming outlook is business as usual.”
Select Harvests Limited (ABN 87 000 721 380)
Level 3, Building 7 Botanicca Corporate Park
570-588 Swan Street Richmond VIC 3121 Australia
Telephone +61 3 9474 3544
www.selectharvests.com.au
As Agent for: Select Harvests Food Products Pty Ltd (ABN 17 058 752 846)
As Agent for: Kyndalyn Park Pty Ltd (ABN 76 006 360 194)
“We are planning to commence the 2023 crop harvest in February and the current harvest period
weather forecast is favorable.” Mr. Thompson said.
Balance Sheet
Despite the inventory reduction, the company is within its current banking limits. Debt to equity levels at
1H FY2023 is expected to be approximately 35% (based on market value of assets gearing would be
approximately 26%).
As a result of the lower realised sale price, inventory write down and current market conditions, it is likely
that Select Harvests’ goodwill will be impaired and, if this transpires, a non-cash write-off of approximately
$26M is expected to be recorded in the 1H FY2023 financial statements.
Mr. Thompson said the Company has a well capitalised and flexible Balance Sheet and added, “The
previously advised sale of the Mountview orchard is progressing but was delayed due to the recent floods
in the Riverina. The Company also has a portfolio of permanent water rights with a current market value of
over $100m which adds to the Company’s financing flexibility.”
This announcement has been approved by the Board of SHV.

DYOR

i hold SHV ( having bought in recently )

careful here the share price can really more around , it is also influenced by the US-AUS dollar exchange rate , but rising costs should be the near-term worry

i am looking to add sub $3.50

Yes, a big price crash early this morning - Down$0.280 (7.16%)

 

[divs4ever]

Yes, a big price crash early this morning - Down$0.280 (7.16%)

have put a sub $3.50 order in the market , probably it won't get hit this month ,

this might even be trade-able if the down-trend continues ( say a 12 month trend down and a modest recovery )

 

[divs4ever]

currently

$4.040
Today's Change Up $0.130 (3.32%)

after touching a 12 month low of $3.62 earlier this morning

maybe my opportunity is gone

 

[The Triangle]

currently

$4.040
Today's Change Up $0.130 (3.32%)

after touching a 12 month low of $3.62 earlier this morning

maybe my opportunity is gone

I somehow don't think you missed the opportunity... My thoughts are on a macro level are that almond tree planting went crazy a few years ago so there is plenty of supply, and with inflation hitting we're going to see people thinking twice about paying a lot of $$$ for things which aren't bread/milk/chicken/beef. I think for this SP to be justified they need almond prices in the $8.50+ and they're forecasting low $6s.

SHV from that announcement are looking at a $18-$22 million reduction in EBIT (I guess reduction sounds better than loss), $26 million asset write off. They've effectively had to borrow ~ $30 million a year for the past 2 years to pay the bills and dividend, so what is it going to be this year? In 2022: Interest payments were $16 million, In 2019: Interest payments were $4 million. Their debt looks entirely variable and there does not appear to be any hedging used. This feels like prime pickings for a major broker & institutional shareholder to force a nice cheap capital raising??

 

[divs4ever]

I somehow don't think you missed the opportunity... My thoughts are on a macro level are that almond tree planting went crazy a few years ago so there is plenty of supply, and with inflation hitting we're going to see people thinking twice about paying a lot of $$$ for things which aren't bread/milk/chicken/beef. I think for this SP to be justified they need almond prices in the $8.50+ and they're forecasting low $6s.

SHV from that announcement are looking at a $18-$22 million reduction in EBIT (I guess reduction sounds better than loss), $26 million asset write off. They've effectively had to borrow ~ $30 million a year for the past 2 years to pay the bills and dividend, so what is it going to be this year? In 2022: Interest payments were $16 million, In 2019: Interest payments were $4 million. Their debt looks entirely variable and there does not appear to be any hedging used. This feels like prime pickings for a major broker & institutional shareholder to force a nice cheap capital raising??

i did buy some earlier ( November and December 2022 ) , 'supply' is basically more driven by US production while the US is the major SHV customer , IF the SHV continues to cultivate Asian customers .

am not sure how many low income and lower middle class consume almonds regularly

so far , two major influences on share price/profitability are the relative price of the Australian dollar ( to the $US , currently ) and the consequences of US West Coast weather

IF SHV successfully expands into Asian markets , cash-flow will be positive more often , than currently , and maybe not need capital raising ,

one option they still MIGHT have is sell/leaseback more land assets ( to RFF , which i also hold )

 

[peter2]

The SHV price chart is looking much more bullish now that price has closed above the resistance level (4.23).
However it's not for me. The weekly chart shows a two year down trend that went below a long time support level (5.00).
Interesting, but agriculture doesn't excite my trading juices. I leave this one to the bees.

 

[divs4ever]

The SHV price chart is looking much more bullish now that price has closed above the resistance level (4.23).
However it's not for me. The weekly chart shows a two year down trend that went below a long time support level (5.00).
Interesting, but agriculture doesn't excite my trading juices. I leave this one to the bees.

View attachment 155647

am sticking with SHV , but i play them long term and am aware this gets buffered be multiple head and tailwinds ( California weather , weak/strong US Dollar etc etc etc )

 

[frugal.rock]

Nefarious instigators are trying to drive the price down.
I reckon the forum moderator's should make a point of divesting all available information about said down rampers to ASIC.
Perhaps ASIC grow a tooth one day.

 

[divs4ever]

Nefarious instigators are trying to drive the price down.
I reckon the forum moderator's should make a point of divesting all available information about said down rampers to ASIC.
Perhaps ASIC grow a tooth one day.

View attachment 157802

have mixed feelings on that i was kind of hoping to pick up extra SHV say sub $3

( i hold SHV )

can be very volatile at times not one i would suggest to the faint-heated

 

[Dona Ferentes]

up 10 per cent, good outlook for 2024 harvest.

 

[divs4ever]

up 10 per cent, good outlook for 2024 harvest.

it should be benefiting from the weak Aussie dollar

( i hold SHV and RFF who leases some land to SHV )

can be volatile i do not recommend this to nervous folks

 

[divs4ever]

1H FY2024 HALF-YEAR RESULTS

| 29,000MT CROP, $2.1M 1H FY2024 NPAT LOSS BUT WELL PLACED FOR CYCLICAL UPTURN

Overview of 1H FY 2024 Half-Year Financial Results

• EBITDA of $18.7 million (1H FY2023 EBITDA loss of $117.1 million)
• 1H FY2024 Loss After Tax of $2.1 million (1H FY2023 Loss After Tax of $96.2 million)
• 2024 forecast almond crop of 29,000 MT (FY2023 Reported 19,771 MT) – Up 46.7%
• Almond price estimate of A$7.52/kg (FY2023 A$6.42/kg) – Up 17.1%
• 1H FY2024 Operating Cashflow of negative $28.2 million (1H FY2023 negative $26.7 million) – Down 5.6%
• Net Debt (excl. finance lease liabilities)/Equity ratio at 31 March 2024 is 57.9% (31 March 2023 44.0%)
• Loss per Share (EPS) of 1.8 cents per share (1H FY2023 Loss Per Share (EPS) of 79.5 cps)
• No Interim Dividend Declared for 1H FY2024

Select Harvests Limited (‘SHV’, ‘Select’ or ‘Company’) announces a Net Loss after Tax of $2.1 million for the first six months of the 2024 Financial Year. Managing Director, David Surveyor, said “The operating environment for the almond industry remains challenging. In the US almond prices have been below the cost of production since the 2020/21 season1 .
Through this period Select has made strong progress on its transformational program and is ready to benefit from the cyclical upturn.
The 2024 reported crop volume is 29,000MT. However, as we conclude the current re-harvesting process and with improving crack-out rates, the 2024 crop volume is now forecast to be 29,500MT – 30,000MT.
Additionally, favourable conditions have meant the 2024 crop is of high quality.
The Company has controlled operating costs and, despite increases in lease cost recognition and inflation, total production costs per kg are lower than last year.
1H FY2024 EBITDA is $18.7 million, a substantial improvement on the 1H FY2023 EBITDA loss of $117.1 million.

Select Harvests has commenced the sale of the 2024 crop with an acceleration of sales.
Final pricing will be determined by the mix of the saleable crop once processing is completed but we are seeing increasing prices and our current price forecast is $7.57/kg.
Consistent with the requirements of Accounting Standard AASB 141 Agriculture, the harvested portion of the 2024 crop has been valued at the estimated fair value less costs to sell.
As a result of the early start to the 2024 harvest and good conditions during the harvest period, the majority of the 2024 crop harvest was completed as at 31 March 2024.
Therefore, the 1H FY2024 Financial Statements recognises 75% of the 2024 crop’s fair value profit.
The harvest commenced in early February, and with good conditions, was completed by late April.
Favourable conditions and early harvesting have led to a positive 2024 crop profile with improved levels of high quality inshell and good sized kernel grades.
Re-harvesting activity will be completed this week and with positive crack-out rates being achieved, the 2024 crop is forecast to be between 29,500 – 30,000MT.
Total 2024 crop growing costs were lower than the prior year with targeted strategic projects leading to improved labour optimisation and favourable fertiliser and operational gains.
Additionally, water prices were lower and, despite higher volumes used (drier conditions) total costs were reduced.
Partially offsetting this were higher electricity costs due to increased water pumping and increased leasehold cost recognition.
The Company’s Carina West Processing Facility is fully operational.
The quality mix is favourable across both inshell and kernel products.
A key Company strategy has been to increase plant capacity by increasing throughput rates.
To date we have increased throughput rates by 30% compared to the same time last year.
This is forecast to lead to lower unit costs of production.
The value created by this will be seen in the second half as we process a larger portion of the total crop in 2H FY2024.
Operational cashflows were better than forecast but lower than 1H FY2023.
This was due to the lower 2023 crop volume leading to less inventory to sell in 1H FY2024.
Additionally, the lower 2023 crop quality profile, reduced pricing environment and the full horticultural costs invested in the 2024 crop all had an impact.
Given the larger 2024 crop and improved quality profile the cashflows in 2H FY2024 are forecast to be materially positive.
Investing cash outflows were lower than 1H FY2023 as the Company consciously lowered its level of capital expenditure as cashflows were forecast to be lower due to prior period crop and market factors.
Additionally, tree development costs decreased as more young trees reached their full maturity profile.
Balance Sheet The Company has continued to maintain headroom within its banking facilities and met all required covenants and is forecast to do so going forward. It has done so despite two consecutive years of unfavourable conditions impacting quality and volumes produced, in addition to historically low almond prices.
As noted above, cashflows will improve in 2H FY2024 as the crop is sold and debt levels are forecast to reduce to between $160m - $170m and a gearing ratio of ~40% (FY2023 gearing ratio of 46%).

Actions have been put in place to lower costs of production, tightly manage capital expenditure and increase the level of sales velocity. These actions, in addition to closely managing the Company’s cashflow, ensures the current debt facilities are sufficient for operations going forward.
Debt and gearing levels as at 31 March 2024, as per normal, approached their seasonal peak.
As a result of the lower 2023 crop and lower pricing earlier in 1H FY2024, debt balances peaked in May 2024 and will decrease during the second half of FY2024 as the 2024 crop is sold.
All of the Company’s assets are held on the Balance Sheet at historical cost.
Property, plant, and equipment (ten Company owned orchards and Carina West processing facility) has a historical value of $323.0m against a market value of $458.4m1 .
Additionally, the current historical value of the water entitlements on the Balance Sheet is $58.8m.
The market value the of the water entitlements is $117.8m, based on recent water market transactions.
It should be noted that the Company’s market value of net assets of $605.2m does not include any value derived from our leased orchards. The leased orchards represent 45% of our portfolio.
Market Outlook The market price in our 1H FY2024 results is recognised at A$7.52/kg – this net number comprises a sell price of A$7.42/kg and includes A$0.10/kg saving achieved through PMO improvements related to freight and logistics.
Following the release of the US Department of Agriculture Subjective Estimate on 10 May 2024 for the 2024 Californian Almond Crop of 3.0B pounds, almond pricing remained neutral.
However strong demand combined with the current low levels of available Californian inventory on hand, particularly that of higher quality, has seen prices increase.
Select Harvests’ forecast is now a price of A$7.57/kg for the 2024 crop. In the longer term we forecast continued improvement in pricing as global supply and demand become increasingly balanced with the removal of almond acres in California and lower carry in volumes on the back of improved demand.
Select’s 2024 sales program is progressing well and to date we have contracted 45% of our total 2024 volumes comprising our own and external growers.
Inshell sales are effectively complete and kernel product is being contracted with improved quality specifications.
The Company continues to grow its customer base allowing for an improved sales profile and customer diversification as we add more direct customers as per our strategy.
1 PP&E valuation based on full valuation in FY2022 and a sample valuation in FY2023
Summary David Surveyor concluded “The first half of FY2024 has shown a significant improvement over last year.
The sales program is well underway and better pricing has been achieved to date. Our processing facility is delivering throughput 30% higher than last year, increasing the plant’s capacity to 40,000MT.
As a result of the targeted initiatives delivered, we have reduced the total cost of production for the 2024 crop.
The 2025 crop growing program has commenced and the Company is executing a full horticultural plan targeting increased yields.
Water allocations remain favourable, dam storage levels are high and temporary market water pricing is expected to remain at below average levels.
These achievements have us well placed going into the second half of the year.
Processing continues at record throughput rates and achieving good quality product for the sales team to sell.
The base has been put in place for the Company to maximise its earnings going forward with an increased crop size, more efficient cost profile, increased ability to process third party product and improved sales and marketing capability.
Debt is forecast to reduce as our sales program continues through the balance of this year.
Select Harvests is focussing on all the factors it can control to grow, process and market as effectively as possible and ensure shareholder returns continue to improve.
Most importantly Select Harvests has continued to improve its safety performance across all measures.
This is extremely pleasing as we continue our journey towards world class safety performance.” Given the 1H FY2024 result, the Board has determined not to pay an interim dividend.
Following the completion of the FY2024 accounts the Board will review the options of making a year-end dividend payment.

This announcement has been approved by the Board of Directors of Select Harvests.

ENDS

i hold SHV

hmmm the market seems to have liked this ( currently up more than 5% )