Sanford writes down $6.5 mln from Australian operations

Thursday 24th September 2015

Sanford, New Zealand's largest listed fishing group, has written down the value of its Australian operations in the latest tidying up of its books, which it says will give it a more focused approach to marketing across the Tasman.

The Auckland-based company has taken a $6.5 million non-cash impairment on the value of its Australian operations "due to the limited quota holding in Australia and the lack of economies of scale in fishing in the Great Australian Bight," it said in a statement. Sanford valued its Australian segment assets at $10.7 million as at March 31, according to its interim report.

"This non-cash impairment will impact the 2015 financial result, but will enable a more focused approach to our Australian marketing strategy," it said.

Sanford said the Australian operation faced higher expenses and reduced volumes in the first half of the financial year, and was developing a plan to fully use its quota. The Australian business generated $13.6 million in first-half revenue, about 6 percent of total external revenue, though Australian customers accounted for about 16 percent of sales.

The fishing company has pared back its operations in the past year, closing an unprofitable mussel processing factory in Christchurch, and this month announced plans to exit the Pacific tuna business, putting the unit's fleet up for sale.

Sanford shares last traded at $4.90, and have increased 2.1 percent this year.

BusinessDesk.co.nz

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