Sanford takes $2m impairment on oyster farms exit
Sanford will sell its Pacific oyster farms in Northland to Maori-owned Aotearoa Fisheries.
BUSINESSDESK: Fishing and aquaculture firm Sanford is to sell its Pacific oyster farms in Northland to Maori-owned Aotearoa Fisheries, suffering a $2 million impairment on exit.
A virus that had ravaged juvenile oysters and forced the closure of Sanford's Kaeo processing plant last December is behind the decision to quit oyster farming and focus on its greenshell mussel business instead.
The 16 Northland farms, covering a total of 128ha in the Bay of Islands and the Whangaroa and Houhora harbours, represented only about 1% of Sanford's total annual revenue, managing director Eric Barratt said in a statement to the NZX near the close of trading for the week.
Sanford shares closed unchanged at $3.98, and down almost 25% over the last year.
"Sanford and Aotearoa Fisheries are of the view that this sale strengthens both companies and will assist the aquaculture industry to continue to grow and prosper," the Sanford statement said.
"Despite having confidence that, in the medium term, there is potential to breed new oysters that have some resistance to the virus, Sanford decided it made more sense" to concentrate on its mussel farms.
Sanford would suffer a loss on the sale, which is expected to have a $2 million impact on second-half earnings. The company remains involved in the Bluff oyster fishery.
A spokesman for Aotearoa Fisheries was not immediately available.
Sanford saw half-year profit to March 31 stall as increased greenshell mussel sales were offset by declines in hoki, squid, salmon and skipjack tuna prices, and the company took a $2 million impairment on its Australian operations.
Tax-paid profit for the period was roughly static at $13.34 million.
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Sanford takes $2m impairment on oyster farms exit
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