Durban - Crookes Brothers, the diversified agricultural group, would increase operating income before taxation by 4 percent during the financial year, Fred Palmer, the chairman, said at yesterday's annual general meeting.
He said lower capital expenditure, increased taxation and the exclusion of dividends from the unbundled CG Smith group meant this year's earnings would be similar to last year's.
Palmer said heavy rains at the beginning of this year had generally assisted cane production on irrigated estates but had adversely affected sucrose yields on dry land estates.
"It also impacted on banana production and grapefruit volumes as well as the quality and size of our grapefruit."
He said soil leaching also necessitated increased fertilisation which, together with higher fuel costs, had effected input costs. The costs would be higher than originally budgeted.
Although the South African sucrose price was 6 percent higher than last year, the Swaziland price had dropped by a similar amount.
Because banana prices were higher than last year, estimates for the year held true, Palmer said.
He said that weather in the Western Cape through to the middle of July had also been unfavourable for grain and deciduous fruit production. But the recent weather should ensure normal crops for the financial year.
Over the past eight years, Crookes Brothers has replaced its oldest golden Delicious and Granny Smith orchards with newer varieties favoured by its markets. "Management is confident that there will be a positive contribution from the Western Cape," he said.
But Palmer cautioned shareholders that Crookes Brothers had excluded any potential earnings from its 30 percent stake in Edulis Mushrooms from which it had being trying to divest.
In the company's annual report, Palmer said audited accounts had again not been received for the year to March. The investment had proved "disappointing" and a request for the majority shareholder to buy back Crookes Brothers' equity has to date been unsuccessful.
Crookes Brother shares closed unchanged at R6,25 yesterday.