Sanford quits Pacific tuna business, lines up buyers for vessels

Tuesday 1st September 2015

Sanford, New Zealand's largest listed fishing group, will quit its underperforming Pacific tuna business and put the unit's fleet up for sale.

The Auckland based company sold its San Nanumea vessel and is in talks with a potential buyer of San Nikunau, its other Pacific tuna ship, after reviewing the viability of the business, Sanford said in a statement. On April 9, it entered into a conditional agreement to sell both international purse seiner vessels, according to Sanford's interim report released in June.

"Continuing unsatisfactory returns driven by low prices and the strict commodity nature of skipjack tuna coupled with ever increasing access costs to the fishery, resulted in the decision to exit this business and offer the vessels for sale," chief executive Volker Kuntzsch said.

Sanford sold one of its international purse seiners last year, which improved the performance of the remaining two tuna vessels in the six months ended March 31, but faced higher access costs around the South Pacific and low prices for skipjack tuna, which hit a five-year low in the period. Skipjack accounted for about 5 percent of its $226 million revenue in the half.

In May, Sanford posted an 18 percent decline in first-half profit as it balanced falling commodity prices for its skipjack tuna, blue mackerel and other oily fish, with strong demand for its deepwater fish catches and stable prices for its greenshell mussels. The company also wrote down the value of certain fishing vessels by $6 million in the period.

The shares were unchanged at $5.10, and have gained 6.3 percent this year.

BusinessDesk.co.nz

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