Sharechat Logo

Sanford almost doubles first-half profit; shares rise to month high

Thursday 26th May 2016

Text too small?

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.co.nz

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

ASB reviews ownership of Aegis
Auckland Airport kicks off next phase of expansion
Cashed-up Plexure eyes acquisitions to accelerate growth as loss shrinks
Tower turns to 1H profit, lifts FY guidance
IRD should have doubled claim against Watson's Cullen Group - Professor
Investore FY profit falls 16% on smaller valuation gain, signals flat dividend for 2020
Synlait receives cease and desist letter regarding Pokeno plant
21st May 2019 Morning Report
NZ dollar steady ahead of central bank speeches
Auditors need to come out of the shadows and explain the value they add: FMA

IRG See IRG research reports