May 26, 2011

 

Sanford's H1 profit increases by twofold

 

 

Fishing company Sanford Ltd declared a first half net profit of NZD13.1 million (US$ 10.5 million) this week, more than twice of previous year's NZD5.3 million (US$4.2 million) because of more catches and higher prices.

 

The result was attributed to a 23% jump in revenue to NZD228 million (US$181.3 million) over the six months to March 31. Prices grew for all fish species as strong demand continues to exceed the firm's ability to meet supply.

 

The board of directors decided to keep the interim dividend at NZD0.90 (US$0.72) per share payable on June 15. The board is focused on reducing the debt level following the Pacifica Seafoods purchase on November 30.

 

Sale volumes and revenue per kilogramme values for skipjack tuna, toothfish and salmon climbed on year and revenue per kilogramme returns for Greenshell mussels, ling and squid also went up. Hoki sale volumes rose.

 

Mussel processing volumes were lower due to problems at the company's two plants, but production volumes at both facilities will go up in the second half of the year.

 

Sanford's recent acquisition of Pacifica and the cooperation prompted by the Pure New Zealand Greenshell Mussel business in China enjoyed new stability in all markets and provoked greater interest in mussel products.

 

All mussel and salmon plants are committed to meeting current orders through the end of August.

 

Squid market prices have rocketed and jack and blue mackerel prices are also more robust in most markets.

 

The company said its hoki business through its half-owned Weihai Dong Won plant in China, which produces breaded portions, has been progressing steadily.

 

However, hoki prices have been under pressure in Europe as elevated catches of Alaskan and Russian pollock are having an effect on major buyers. Prices for smaller-sized scampi are also strained.

 

The company is hopeful for the six months to September 30.

 

"We expect to see further improvement in profitability from higher prices despite the impact of high fuel prices and the high New Zealand dollar," Sanford said.

 

Greenshell mussel production is anticipated to increase toward levels of 100 tonnes per day each and, based on current numbers and growth rates, salmon harvest volumes will surpass those of last year.