Sealord's annual profit falls 19% on write down of now-exited UK business
By Rebecca Howard
Dec. 27 (BusinessDesk) - Sealord's annual profit fell 19 percent largely on an impairment charge of its British-based Sealord Caistor processing business, which was sold to shareholder Nippon Suisan Kaisha.
Net profit fell to $18.5 million in the year ended Sept. 30 versus $22.9 million a year earlier, according to holding company Kura's financial statements, lodged with the Companies Office. Discontinued operations contributed a loss of $3.2 million to the bottom line, including an impairment charge of $4.9 million. Sealord's income tax expense was $6.4 million versus $3.7 million in the prior year.
Sealord's figures were better at an operating level with a 5.4 percent gain in earnings to $28 million as expenses continued to be curbed. The Nelson-based company, jointly owned by iwi fishing group Moana New Zealand and Japan's Nissui, paid dividends of $9.2 million in 2017 versus $4 million in the prior year.
Revenue from continuing operations at New Zealand's second-largest fishing company shrank to $325.8 million from $337.3 million in the prior year due to the slimmed down business, while the cost of sales from continuing operations was $233.6 million versus $241 million in the prior year. As a result, gross margins narrowed slightly to 28 percent from 28.5 percent in the prior year.
In recent years Sealord has gone through a period of exiting unprofitable businesses which it deemed "unsustainable." The decision to sell its interests in Sealord Caistor is consistent with Sealord’s focus on operational performance, the company said in a release. "Going forward, the group now has a more sustainable margin structure," chief executive Steve Yung said in a statement.
Construction of Sealord’s $70 million purpose-built factory trawler – the first new design in New Zealand’s deepwater fleet in over 20 years – remains on track for delivery in May 2018, it said. In September, Sealord said it was recruiting for 80 new positions for the trawler.
Rival fishing company Sanford reported an 8 percent increase in annual profit to $37.5 million in the year to Sept. 30 while sales rose 3.1 percent to $477.9 million,