The company said it was buying fewer Hawke\u2019s Bay peaches as demand for New Zealand-grown canned peaches was declining.<\/p>\n
Financial records show H.J. Heinz Company (New Zealand) made losses over the past three years and took an impairment of more than $210 million in 2024.<\/p>\n
It made a loss of $187.9m on the back of that impairment in the year to December 28, 2024, which compared with a $51.9m loss in 2023. In 2022, the loss was $54.1m.<\/p>\n
Payments to suppliers and employees during the 2024 year totalled $747.9m, more than the $738.3m it received from customers.<\/p>\n
The company was left with cash and cash equivalents of $5.54m.<\/p>\n
Of the $210.57m impairment charge, $117.6m of it was recognised against intangibles, which includes goodwill, brands, trademarks and customer lists.<\/p>\n
This can indicate the value of Wattie\u2019s assets was not as much as previously thought.<\/p>\n
A further impairment amount of $83.5m was recognised against property, plant and equipment, meaning the value of Wattie\u2019s vehicles, real estate, equipment and machinery had to be devalued from prior estimates.<\/p>\n
The remaining $9.38m was recognised against right-of-use assets.<\/p>\n
Wattie\u2019s explained in its financial statement that it experienced a significant decline in sales volume and budgeted gross margins, resulting from a shift in consumer sentiments from premium brands to other brands. <\/p>\n
\u201cThese are mainly driven from the increasing cost of living pressures and challenging operational conditions.\u201d <\/p>\n
As part of its impairment testing the company also undertook a sensitivity analysis to determine the impact of any significant change to its key assumptions.<\/p>\n
It said \u201ca reasonably possible change in any key assumptions would further result in an impairment loss\u201d of around $14.4m to $36.7m.<\/p>\n
Asked to comment on the impairments and the business\u2019 wider financial position, a spokeswoman for Wattie\u2019s said: \u201cWe are unable to comment on our financial information. <\/p>\n
\u201cHowever, the reduced intake of peaches from local crops is related to the increased consumption by consumers of the cheaper imported products following the cyclone.\u201d<\/p>\n
2023 software impairment<\/p>\n
In 2023, the business reported total revenue of $739.3m. Its payments to suppliers and employees were $821.4m, while it received $865m from customers. Its cash position was $4.9m.<\/p>\n
Weighing on its $51.9m loss in 2023 was the company\u2019s decision not to proceed with the implementation of an enterprise resource planning system (SAP).<\/p>\n
Wattie\u2019s was forced to write off $12.4m, representing the money spent on the system\u2019s development and implementation. <\/p>\n
2022 goodwill impairment<\/p>\n
The largest contributor to the 2022 loss was a goodwill impairment of $61.9m relating to the Heinz Wattie\u2019s business, as its future earnings potential had weakened and its accounting value had to be reduced.<\/p>\n
The last time the company made a profit was in its 2021 financial year when it made $27.7m.<\/p>\n
Wages for the business have also risen over the past three years, up from $106.3m in 2021 to $126.5m in 2024.<\/p>\n
It hasn\u2019t paid a dividend to its parent company since the 2020 financial year when it paid $35m.<\/p>\n
Wattie\u2019s history<\/p>\n
Wattie\u2019s has a long association with New Zealand. It began in 1934 in Hastings with James Wattie and Harold Carr, who set up the business to handle excess fruit.<\/p>\n
Its first product was jam. In 1980, the company merged with Goodman Fielder and then it was bought by American-based H.J. Heinz Company in 1992 for $565m.<\/p>\n
Heinz merged with Kraft in July 2015, creating the world\u2019s fifth-largest food and beverage company at the time.<\/p>\n
The roughly US$45 billion deal was orchestrated by Warren Buffett\u2019s Berkshire Hathaway and Brazilian private-equity firm 3G Capital.<\/p>\n
The company reported net income of US$2.75b in FY2024 down 3.5% on the prior year.<\/p>\n