23 May 2019

Sanford sees positive second half after challenging first half

2:06 pm on 23 May 2019

Sanford's first half net profit has fallen 16 percent in the six months ended in March to $22.9 million, which included a $4.1m sale of some of Sanford's pelagic quota.

Sanford seafood company.

Photo: Supplied / Sanford

Sanford's profit for the six months to March fell 16 percent to $22.9m.

Last year's result had been boosted by a $9.9m insurance settlement for earthquake damage to Sanford's Havelock mussel processing plant.

The company's profit benefited from a 1 cent a kilogram increase in the price of unprocessed fish to 57 cents.

Group chief executive Volker Kuntzsch said it was a satisfactory first half, considering the challenges Sanford faced during the period.

He said the death of a crew member on board its deepwater vessel San Granit, had resulted in the ship remaining in port for three months, which contributed to an overall 12 percent year-on-year drop in catches.

Revenue fell 2.8 percent to $265 million.

Mr Kuntzsch said the divestment of the pelagic assets was in line with Sanford's strategy to focus on areas where maximum value can be achieved.

"Our ability to improve returns on species like mackerel is limited and depends on factors such as global commodity pricing where we have a negligible influence."

Sanford chief financial officer Katherine Turner said the challenges were reflected in the result.

In addition to the death of crewman, Steffan Stewart, Ms Turner said some ongoing climatic challenges, had a negative affect on its mussel lines in the Coromandel.

Among the highlights, was the opening of the refreshed Auckland Fish Market in Wynyard Quarter, which Mr Kuntzsch said had been a great success.

Sanford also launched a line of greenshell mussel powder capsules for natural inflammation management, which coincided with its first online e-commerce sales.

He said the company had also been granted resource consent to allow a higher nitrogen cap in its salmon farming operations in Stewart Island.

"We believe these changes will bring significant benefits to the area in a sustainable way."

Mr Kuntzsch said the outlook for the rest of the fishing and financial year is, on balance, positive.

"We are cautiously optimistic about the second half of our financial year as our fishing volumes are encouraging and our salmon business is developing well, but an algal bloom in the Marlborough Sounds has limited the mussel harvest season for an extended period."