New Zealand seafood company Sanford Limited has reported an 8% drop in earnings and 16% drop in profit following the death of a crew member alongside environmental challenges.
Adjusted Earnings Before Interest and Tax (EBIT) was NZD$32.6m for the six months to 31 March 2019. This represents a decrease of 8% on the same period last year (NZD$35.4m). The company saw a Net Profit After Tax (NPAT) of NZD$22.9m, which is a 16% reduction on the same period last year (NZD$27.3m). It achieved a slight lift in its EBIT per greenweight kilogram from $0.56 per kilogram in the first six months of 2018 to $0.57 per kilogram in the same period for 2019.
Group CEO, Volker Kuntzsch, said: “The first half of the 2019 year was marked by the sad loss of crew member Steffan Stewart on board our deepwater vessel San Granit. Following Steffan’s death, we undertook an extensive review of all factory equipment and processes with a view to trying to identify further ways of mitigating potential health and safety risks. The Granit remained in port for three months, which impacted on our catches and subsequently on our financial result.”
Sales down
The reduced catches resulted in a decrease in sales volume of 12% year-on-year, with revenue flat on a comparable basis at $272m.
Sanford noted that the prior year included a one-off insurance settlement for earthquake damage to Sanford’s Havelock mussel processing plant of $9.9m, whereas the 2019 result included a gain on sale of $4.1m for some of Sanford’s pelagic quota.
One key development in the first half of the 2019 financial year was the divestment of the pelagic assets which Mr Kuntzsch says was in line with Sanford’s strategy to focus on areas where maximum value can be achieved.
Substantial progress
Sanford’s chief financial officer, Katherine Turner, noted that the company has faced environmental challenges such as increased biofouling on our mussel lines in the Coromandel, but said its mussel and salmon business units are performing better. She said the company is increasing the proportion of high value products its produces from species such as hoki.
In the first half of 2019 the company opened the refreshed Auckland Fish Market, which also marked the opening of the rebranded Sanford & Sons fishmonger. Sanford also launched of its wholly owned supplements brand Sea to Me.
A further positive development in Sanford’s aquaculture business has been the granting of a consent variation allowing a higher nitrogen cap in the company’s salmon farming operations in Stewart Island.
Mr Kuntzsch said the company is “cautiously optimistic about the second half of our financial year as our fishing volumes are encouraging and our salmon business is developing well, but an algal bloom in the Marlborough Sounds has limited the mussel harvest season for an extended period.”
