Pandemic precludes Sanford from paying dividend

AUCKLAND: New Zealand seafood company Sanford said it would not pay a final dividend after the effect of the Covid19 pandemic drove its net profit down by 46% to $22.3 million for the year to September.

The company had already advised the market that it was in for a steep fall in earnings due to the pandemic.

Revenue dropped by 14% to $468.8 million.

‘‘The business sees this decrease as directly attributable to the Covid19 pandemic and its impact on food service globally,’’ Sanford said.

However, the company said it had learnt from the challenges and was adjusting to pandemic conditions, making the business better prepared for the year ahead, and remained confident that its longerterm strategy was the right one.

The dividend news sent Sanford’s share price down 17c to $5.07.

Acting chief executive Andre

Gargiulo said the decision to scrap the dividend was not taken lightly.

‘‘It was precautionary due to the volatility in the market, which still remains.’’

The company has already paid a 5c dividend for the halfyear, which was down from 9c in the previous corresponding period.

As it stands, Sanford does not have a dividend policy.

‘‘We will look, at some point of time, into publishing one,’’ Mr Gargiulo said.

Sanford said that, like many seafood companies globally, it had been reliant on food service as a sales channel, an area which has been hit hard by the lockdowns resulting from the Covid19 pandemic response.

Sales into North America fell by 30% on last year.

Recent changes to sales tactics in global markets, to facilitate more consumerfacing sales, meant Sanford had a path to increased profitability in 2021.

‘‘While we acknowledge this is a disappointing result, we are confident that our strategy to get closer to our consumers and maximise the value of our products is the right one,’’ Mr Gargiulo said.

Sanford said its balance sheet and liquidity remained robust, with a gearing ratio at 31% compared with 24% last year.

The board was making good progress in recruiting a new chief executive to replace Volker Kuntzsch, who left last month. — The New Zealand Herald