Sanford reports 12.9% profit
CHALLENGING ocean climatic conditions undermined Sanford’s seafood harvesting last season, including a marine heatwave and algal blooms.
For its year to September trading, revenue grew 7.7% to $515 million, adjusted earnings before interest and tax (ebit) rose 1.5% to $64.7 million and aftertax profit rose 12.9% to $42.3 million, albeit the latter being propped up by a $6.8 million earthquake insurance settlement.
In presenting its full year report, Sanford reiterated its condolences to the family of a 26yearold crewman who died on its factory fishing vessel San Granit on Wednesday, south of Banks Peninsula.
Sanford chief executive Volker Kuntzsch, said although the result fell short of expectations, mainly due to challenging climatic conditions during the year, an otherwise sound performance confirmed progress was being made to extract higher value from both wild and farmed seafood harvests.
Sales revenue increased by 7.7% from $477.9 million a year ago to $515 million.
‘‘This increase was driven by improved pricing across farmed and wild caught species, an increase in our fresh sales, an improved product cascade, primarily for hoki, and the company’s investment in inno vation starting to contribute to returns,’’ he said.
Despite the disappointing result, Sandford’s board had approved in principle a $100 million investment programme, over the next two years, for operational upgrades, including some fleet replacements.
Sanford paid a 14c per share final dividend, replicating last year’s full dividend of 23c.
Operating cash flow was strong, up 44.3% to $72.6 mil lion, Mr Kuntzsch said in a statement.
A ‘‘marine heatwave’’ affected salmon growth, which led to a suspension of sales for 10 weeks and, in Marlborough, an algal bloom affected mussel growth and yields.
There was an extended shutdown of the Havelock processing plant for earthquake repairs, while Sanford’s inshore fishing fleet was reduced and also affected by poor weather, albeit that was offset by engag ing private fishing partners.
‘‘The climate had a greater impact than experienced before, with abnormally high water temperatures during the summer resulting in challenges across the aquaculture and fishing divisions,’’ Mr Kuntzsch said.
Climatic conditions had also affected total wild catch volumes. Deepwater landings were down 2% and inshore down almost 9%. However, this was partially mitigated by catches by fishing partners.
He said Sanford was increasing the volumes of frozenatsea fillets, instead of blocks, and there were investments in branding, innovation and replacing third party distributors internationally with directtocustomer sales, which was improving returns
There would also be further investment in processing and vessels, to increase product quality and minimise waste.