Sanford beats ‘challenges’
SANFORD has posted an increased fullyear profit of $35.7 million, due to higher farmed salmon prices and boost from much of its wild fish catch volumes.
Revenue for Sanford, the country’s largest listed fishing company, for its year to September rose 3% to $477.9 million, adjusted earnings before interest and tax rose from $63.4 million a year ago to $63.7 million and aftertax profit rose 8% to $37.5 million.
The adjusted ebit of $63.7 million was before impairments, oneoff restructuring and other oneoff costs of $3 million.
Sanford declared an unchanged secondhalf dividend of 14c per share and following the announcement its shares slipped to $7.97, but remained up almost 25% on a year ago.
Sanford chief executive Volker Kuntzsch was pleased with the result, in what he described as ‘‘a successful, but at times testing, year’’.
There had been various ‘‘challenges from nature’’, including an outbreak of Bonamia ostreae affecting Stewart Island oysters and the Kaikoura earthquake.
Also, Sanford’s new deepwater vessel San Granit took longer to commission than expected.
There was a bottleneck of other vessels requiring annual maritime surveys and a late start to the West Coast hoki season with reduced catches, and laterthanusual toothfish sales came after financial year end. Last year that was $4 million in earnings before interest and tax.
However, Mr Kuntzsch said Sanford’s diverse product portfolio and geographical spread had been an advantage when facing those challenges.
Forsyth Barr broker Damian Foster said the result was in line with brokers’ expectations,
while the higher revenue had been offset by extra costs in commissioning of the San
Granit.
‘‘Initial challenges with the
San Granit yielded disappointing results for several months from the vessel,’’ Mr Foster said.
However, he said the revenue gains came from higher salmon pricing and bigger wild catch volumes and management also expected a rebound in catch volumes and value creation during full year 2018.
The secondhalf 14c dividend was left unchanged as Sanford expected capital expenditure to be slightly ahead targets and its debt ratios were not quite met, he said.
For the year, Mr Foster said, Sanford had achieved an earnings before interest and tax per kilogram of 50c, down 7%, which may have been because toothfish revenue was pushed into the current financial year.
However, management had indicated the focus was on improving that return towards the longterm goal of $1 per kilogram, and was core to 2018 operations.
Mr Kuntzsch said despite greenweight tonnage being flat, the 3% revenue gain to $477 million reflected the company’s strategy of increasing the value from products.
Stronger pricing was achieved for its Stewart Island farmed King salmon, including a new Big Glory Bay brand. Prices had strengthened for toothfish, scampi, snapper and orange roughy and there were increased sales in the domestic market.
‘‘Sanford stands to benefit from a greater focus on innovation and branding and from the growing middle classes in Asia and ageing populations in developed countries, which point to more seafood consumption per capita,’’ Mr Kuntzsch said in a statement
The yearearlier after tax profit included a $3.1 million loss from a discontinued operation, after the company took a further $5 million impairment against San Nikunau, its remaining International Purse Seine vessel, which was sold in May last year for $3.9 million, BusinessDesk reported.