Sanford lifts profit despite 'challenging year'

Sanford [NZX: SAN], New Zealand's largest listed fishing group, lifted annual profit 10 percent as gains in its deepwater fishing and aquaculture operations offset falling skipjack tuna prices.

Tax-paid profit before minority interests rose to $22.4 million in the year ended Sept. 30, from $20.4 million a year earlier, the Auckland-based fisher said in a statement. Sales fell 2.2 percent to $452.4 million, reflecting "highly variable operational performance across the business", which saw the Australian arm continue to trade unprofitably.

Earnings before interest, tax, depreciation and amortisation fell by 5 percent to $46.7 million in the first year under new leadership since the departure of veteran former chief executive Eric Barratt.

Sanford operates across the fishing industry, including inshore and deepwater fishing and processing, aquaculture operations farming salmon and mussels, and three international tuna vessels. The company has struggled against falling commodity prices for its skipjack tuna, blue mackerel and other oily fish, which in part has been offset by strong demand for its deepwater fish catches and stable prices for its greenshell mussels.

"This year has been as challenging as prior years," the company said. "The diversity has again helped to combat low commodity prices for the key species like skipjack tuna and other pelagics."

Earlier in the year, Sanford agreed to buy the mussel farming and processing assets of Greenshell NZ Limited and Greenshell Investments from receivers to add supply and "minimise biological risk through geographical diversity". Previously directors of the mussel company had tried unsuccessfully to sell the assets and there were concerns about its ongoing viability and “various complex contractual arrangements,” according to the first receivers’ report. The mussel farms were kept operating pending the sale of assets.

The company didn't break out results by market segment, instead providing statutory profit figures for its Australian and New Zealand operations. The New Zealand unit reported 5.2 percent drop in profit to $20.7 million, on largely flat sales of $428 million. Australia narrowed its loss to $480,000, from a loss of $2.7 million a year earlier as sales fell 29 percent to $27 million. 

Revenue fell across its Asian, Pacific, African and Middle Eastern customers, but did pick up in Europe and North America. 

The company declared a 14 cents per share final dividend, payable on Dec. 10, keep the full annual payout at 23 cents per share. The stock was unchanged at $5.20 and has gained 12 percent since the start of the year.

(BusinessDesk)