INDEPENDENT NEWS

Sanford almost doubles first-half profit

Published: Thu 26 May 2016 12:06 PM
Sanford almost doubles first-half profit; shares rise to month high
By Tina Morrison
May 26 (BusinessDesk) - Sanford, the country's largest listed fishing group, almost doubled its first-half profit as it focused on lifting values over volumes and benefited from lower fuel costs and a weaker New Zealand dollar.
Profit jumped to $18.8 million, or 20.1 cents per share, in the six months ended March 31, from $9.6 million, or 10.2 cents, a year earlier, the Auckland-based company said in a statement. Revenue from continuing operations edged up 1.3 percent to $215.6 million even as sales volumes sank abut 20 percent as the company extracted more value from its catch.
Shares in Sanford rose 2.6 percent to a month high of $5.85.
Sanford chief executive Volker Kuntzsch, who joined the company in December 2013 with a 25-year career in the international fishing industry, is reorganising the group to focus on increasing value over volume, exiting unprofitable units and bringing the fisher closer to its customers. It sold its last Pacific Tuna vessel in the period, recognising a $5 million impairment charge after deciding to quit the "unsustainable" business, and said sales were impacted by lower catches of skipjack tuna and hoki as it moves to align supply with demand.
"The bottom line improvement resulted from favouring the production of chilled fish over frozen commodity wherever possible, aligning production with customer demand, a weaker NZ dollar and lower fuel cost," Kuntzsch said.
"While our ‘focus on fresh’ emphasises an increasing allocation of raw material to the chilled sector, we will continue to convert most of our wild catches and aquaculture harvests into frozen product for logistical reasons," the company said. "Through better alignment with our customer base and a move away from the commodity product market, we will maintain our focus on adding value to these products.”
Sanford said a good high-value toothfish catch compensated for a 10 percent reduction in its overall wild catch during the first half as it had lower catches of pelagic fish such as mackerels and tuna and a variable performance of its fishing fleet.
In its aquaculture unit, which includes king salmon and greenshell mussels, the salmon harvest volume increased 8.6 percent and strong domestic demand for fresh salmon boosted values. However mussel growth was impacted by the El Nino weather pattern, leading to an increase in less desirable larger sized mussels and a delayed start to the season saw harvest volumes slip 30 percent from last year.
Sanford will pay a 9 cent dividend on June 17, unchanged from the year earlier.
(BusinessDesk)
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Scientists discover one of world’s oldest bird species
By: Canterbury Museum
Helping regions fill skills shortages and Kiwis come first
By: New Zealand Government
Report: Govt Inquiry into Auckland Fuel Supply Disruption
By: Inquiry into The Auckland Fuel Supply Disruption
Trump authorises use of emergency crude stockpile
By: BusinessDesk
Migrant Workers Association criticises work visa overhaul
By: RNZ
More detail needed on migrant worker policy
By: BusinessDesk
Work visa changes putting New Zealanders first
By: New Zealand First Party
MIA welcomes Government sector agreement announcement
By: Meat Industry Association
Streamlined temporary work visa process is a real positive
By: Meat Industry Association
Horticulture NZ welcomes temporary work visa changes
By: Horticulture NZ
Immigration changes a boost for regional New Zealand
By: Business NZ
Work visa changes to support NZ tourism employers
By: Tourism Industry Aotearoa
DairyNZ welcomes immigration changes
By: DairyNZ
Temporary work visa improvements a welcome start
By: Business Central - Wellington
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media