Wednesday 17th March 2021
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Sanford Limited is continuing to face market challenges, due to the ongoing disruption to global food service markets caused by the impacts of Covid-19. Year-to-date trading conditions and expected financial outcomes are similar to those seen in the second half of the prior financial year ended 30 September 2020.
Acting CEO Andre Gargiulo says the ongoing impacts of Covid-19 remain a significant challenge for seafood producers focused on food service.
“While longer term dynamics remain positive, difficult conditions could remain for the full year.”
The company has taken action to reduce inventory levels, which have flattened out. However, pricing is compressed, being on average 8% lower than the same period last year, adversely impacting margins. Supply chain and inventory holding costs are up approximately 25 percent on a year ago, reflecting cost pressure from current inefficiencies in global freight markets.
Pricing is under pressure across all divisions. Sales volumes remain consistent for salmon and wildcatch but mussels are negatively impacted in both volume and pricing, when compared to the prior six-month period. Mr Gargiulo says the company’s balance sheet remains strong. Sanford has also completed the sale of two non-strategic property assets in Christchurch and Tauranga, which has realised an additional $24m of cash receipts.
Sanford will report its interim results in the second half of May 2021.
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