29 May 2024

Sanford hooks a healthy half-year profit

11:31 am on 29 May 2024
Sanford Big Glory Bay brand salmon.

Sanford's salmon revenue was up 18 percent on the same period in 2022, contributing more than $23 million to the profit. Photo: Supplied / Sanford

Good global prices for seafood have helped fishing business Sanford catch a healthy half-year profit.

The company has reported a net profit after tax of $16.2 million for the six months to 31 March.

That was up 46 percent on the $11.1 million for the same period the year before, while the $276 million revenue was about on par.

Sanford's newly-appointed managing director David Mair said the half-year performance was pleasing, as it was the company's highest half-year adjusted earnings before interest and tax in recent times.

"Our improvement has been driven by a continuing strong performance from the salmon business, an improving mussel result and a positive result for wildcatch following the sale of the North Island inshore ACE and related assets in October 2023."

The sale of entitlements to Moana New Zealand last year added a $1 million boost to profits.

Salmon revenue was up 18 percent on the same period in 2022, contributing more than $23 million to the profit.

And strong pricing and demand for the company's greenshell mussels - despite low seeding in Coromandel last year affecting volumes - also added $9 million dollars to the profit.

There was also a slightly improved profit result across Sanford's wildcatch business - its main revenue generator.

"Overall, wildcatch catch volumes were down 11 percent on the prior half-year, partially offset by strong pricing in our most profitable species, scampi," Mair said.

This brought revenue down 9 percent on the same period the year before.

In 2020, Sanford partnered up with New Zealand health and beauty brand Two Islands to use its marine collagen in the company's health and well-being products.

But Mair said it had had some challenges.

"The commoditisation of some nutraceutical products has led to a challenging performance in our 50 percent held Two Islands investment.

"As a result, Sanford has written down the value of this business by $3.3 million."

Despite this, Sanford chair Sir Rob McLeod said the company had made excellent progress on its business strategy - and it had a positive outlook for the coming year.

"The new government is supportive of the seafood and fishing industries, which should assist our growth ambitions, as we look to expand our farms and increase our harvest, catch and export of quality seafood to the world," McLeod said.

"Following a healthy first half result, we expect a more moderate second half performance in line with capacity and available inventory. We remain on track to deliver another improved full year performance in FY24."

Net debt increased to $220.5 million as of 31 March, from $183.6 million the same period the year before - reflecting capital expenditure of approximately $24 million and funding of increased inventory.

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