Comments on Sanford Limited Half Year Result

SANFORD LIMITED

SUSTAINABLE SEAFOOD

Comments on Sanford Limited Half Year Result

The Directors of Sanford Limited report an unaudited tax paid profit of $11.7m for the six month period ended 31 March 2007 compared with $11.0m for the same period last year.

Sales revenue decreased by 2% in the period from $188m last year to $184m this year.

With the NZ dollar progressively strengthening from US 66 cents at October 2006 through to US 72 cents at the end of the period our foreign exchange losses for the six months totalled $7.3m compared to a gain of $7.2m in the same period last year when the NZ dollar declined from US 69 cents to US 61 cents. Most of the foreign exchange losses are non cash losses and may be reversed if the NZ dollar declines in the second six months.

Despite the high currency EBITDA increased from $24.9m last year to $26.5m this year with increased aquaculture production contributing higher returns and improved results from the Pacific tuna vessels with tuna market prices consistently higher than in past seasons.

Depreciation and amortisation reduced from $8.5m last year to $7.8m this year while interest costs reduced from $6.6m last year to $5.9m this year.

A significant contribution to the result for the period was a one-off capital gain of $7.5m on the sale of the 100% investment in the Argentine vessel owning subsidiary and the 70% investment in the vessel operating company. The final gain was ahead of previous indications enhanced by operating results up to the date of disposal and the realisation of additional working capital.

With the lower operating earnings taxation declined from $5.9m last year to $1.8m this year.

A number of factors affected profitability during the first six months of the financial year, including: _ Overall catch and production levels continued to improve and were 6% ahead of last year although after removing the Argentine comparative catch levels the increase is 10%. Catches increased in the inshore fishery with the increased purse seine landings of blue mackerel in Tauranga, as well as improved catches in the deepwater and higher production levels in our aquaculture activities.

_ Continuing improvement in the catching performance of the Pacific tuna vessels coupled with higher average prices resulted in improved returns from this operation.

Sales volumes of hoki, mussels and salmon were ahead of last year. Squid and orange roughy volumes were down on the previous year but most other species volumes were similar. Net returns from species such as hoki, ling, mussels, smooth dory, salmon, skipjack and snapper improved over the previous year while orange roughy and squid returns declined.

_ The improvement in aquaculture production was as a result of increased mussel production at the North Island Mussel Processing (NIMPL) joint venture in Tauranga and our plants in Havelock and Bluff. Salmon production is steadily being increased to meet increased demands from fresh markets in New Zealand, Australia and the United States as well as improved returns from the Japanese frozen market.

The Directors have today declared an interim dividend of 9 cents per share. The share register will close 5pm Friday 8 June 2007 and reopen 8.30am Monday 11 June 2007 to determine dividend entitlement. The fully imputed dividend will be paid on Wednesday 20 June 2007.

Fishery Products International Limited (FPI), Canada (15% owned)

In the last few days the Newfoundland and Labrador Government have approved in principle two transactions which will see the majority of the assets of FPI sold. The remaining asset is a company in the United Kingdom which is also being sold. FPI can now move to finalise the sale of all assets which will allow Sanford to realise its investment.

Sanford Limited purchased its interest in FPI in late 1999 at an average cost of C$8.75 per share. In 2005 we wrote the value of our shares down to C$7. Since early April 2007 FPI shares have traded on the Toronto stock exchange between C$14 and C$15 per share. If we were to achieve a realisation of C$15 per share the cumulative return adjusted for dividends is 8% per annum and will produce a one-off gain of approximately NZ$20m and cash proceeds of NZ$40m which will be used to reduce term debt.

Outlook

Markets for most species are generally positive and the overall demand for quality frozen at sea and fresh products continues to improve. Our aquaculture products continue to be regarded as high quality product grown in hygienic, clean and pure New Zealand waters.

If the New Zealand dollar declines we could expect to see an improvement in earnings in the second six months and when the realisation of our interests in Canada are finalised we should report a satisfactory result for the full year.

INFORMATION REQUIRED BY NZX

SANFORD LIMITED
Unaudited results for announcement to the market

Reporting Period 6 months to 31 March 2007
Previous Reporting Period 6 months to 31 March 2006

/ Amount (000s) / Percentage change
Revenue from ordinary activities / $NZ 184.0m / -2.2%
Profit (loss) from ordinary activities after tax attributable to security holder. / $NZ 11.7m / +5.7%
Net profit (loss) attributable to security holders / $NZ 11.7m / +5.7%
Final Dividend / Amount per security / Imputed amount per security
/ 9 cents per share / 4.4328 cents per share
Record Date 8 June 2007
Dividend Payment Date 20 June 2007

ENDS

Interim Financials 31 March 2007 (PDF)

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