Sanford lifts first-half profit 43% with focus on higher value fish fillets
By Rebecca Howard
May 23 (BusinessDesk) - Sanford, New Zealand's largest listed seafood company, lifted first-half profit 43 percent as it continued to focus on higher value items such as fish fillets rather than frozen commodity products.
Profit rose to $27.3 million, or 29.2 cents per share, in the six months ended March 31, from $19 million, or 20.4 cents, a year earlier, the Auckland-based company said in a statement. Revenue from continuing operations lifted 18 percent to $272.7 million. Earnings before interest and tax lifted 14 percent to $35.4 million.
Sanford said the result was also driven by strong sales growth in both domestic and international markets. Europe and China were two highlights: overall sales in these territories increased by 85 percent and 79 percent respectively. Both regions now represent more than 10 percent of total revenue, it said.
Stronger global squid prices and good demand for green shell mussels were other positive contributions. The company also pointed to support from an increasing number of contract fishers who supplement Sanford’s inshore catching capacity by harvesting high-value line caught species for its premium product portfolio.
Chief executive Volker Kuntzsch said the result is particularly pleasing given the challenges. "Weather has continued to be an issue for us. Cyclones, heavy rains and warmer ocean water temperatures impacted on our operations across the country. That meant smaller vessels had to seek shelter from the weather on several occasions and our farmed salmon in Stewart Island’s Big Glory Bay also felt the effects of warmer waters during the summer," he said.
Sanford's mussel business performed above the same period last year, with both volume and pricing trending higher. The company continues to focus on diversifying its mussel product portfolio in order to reduce dependence on the frozen half-shell mussel market.
Chief customer officer Andre Gargiulo said there was growing demand for green shell mussel powder from the recently acquired Enzaq plant in Blenheim. As a result, the company is investing in greater production capacity and seeks to double output over the next few months.
The company will pay a 9 cents per share dividend on June 15, unchanged from the year earlier.
The stock fell 0.6 percent to $7.80 and has fallen 5.4 percent so far this year.