Bermuda-incorporated Asian Citrus, China's largest orange plantation owner, slashed its dividend by over two fifths after lower production dented revenues and profits over the year to June 30th.
The AIM-listed group said that total orange production fell by 10.2% to 218,600 tonnes during the year as a result of a replanting programme and the outbreak of citrus canker in the Hepu Plantation, which contains 1.3m orange trees. The firm said it has taken measures to combat the citrus canker such as "trimming, additional application of fertilisers, pesticides and bactericides and strengthening the inspection".
The company's other larger operating plantation, Xinfeng, which has 1.6m trees, was able to grow production slightly.
Revenue fell by 16.3% from RMB1.78bn to RMB1.49bn over the 12-month period, while net profit sank 36.5% from RMB629m to RMB400m.
Sales of oranges from the two operating plantations fell by 13% to RMB920m, as the falling production was met with a 2.9% decline in the average selling prices. Meanwhile, revenue from processed fruits dropped 20.8% to RMB564m due to the lower average selling prices of pineapple juice concentrates, its main product, compared with last year.
Nevertheless, the company had warned in August that total revenue would be down 20% and core profits would fall 40%, so these results were not as bad as some had feared.
The final dividend was dropped to RMB0.05 from RMB0.13 last year, leaving a total dividend of RMB0.10 down 44% from RMB0.18, as company continued to issue dividends of at least 30% of its core net profit.
"We are confident in the prospects for our business and have taken proactive measures to ensure 2013/14 will be a more productive year for Asian Citrus," said Chairman Tony Tong.
The company's third plantation in Hunan province remains on track to begin production in 2014 after the planting of 300,000 grapefruit trees during the period. The company said that Hunan had 1.4m summer orange trees and grapefruit trees by the end of June.
The stock was down 3.73% at 21.66 by 08:37 on Friday.