Sealord blamed as losses hit home

22:33, Jan 27 2014

Maori fishing dreams of riches have turned red with iwis' flagship commercial operations reporting heavy losses.

Auckland-headquartered Aotearoa Fisheries (AFL) has seen earning plunge $23 million while Nelson-based Sealord Group has scored a $36.54m loss.

AFL, whose shareholders include most of the country's major iwi, owns half of Sealord and both are suffering as a result of a disastrous Argentinian fishing adventure.

AFL said Sealord had made a $44.4m loss on the sale last year of its Argentinian subsidiary, Yuken.

Aotearoa in turn aid it could not pay a dividend for the first time since it was incorporated in 2004.

The company's annual report said their AFL group's loss for 2013 was $6.04m, against a profit in 2012 of $17.06m, a drop of 135 per cent.


AFL chairman Whaimutu Dewes termed the result "extremely disappointing" and blamed Sealord.

Sealord has not published their accounts but a fishing industry web service, Undercurrent News, said they had made a heavy loss and as a result the head of Sealord's international fishing division, Ross Tocker, had stepped down.

Sealord confirmed that Tocker's move but said he was continuing to work in "a part-time consulting role providing expertise to several key strategic projects such as precision seafood harvesting."

Dewes said AFL made a profit on its own operations, 7 per cent above expectations.

But it was insufficient "absorb the equity accounting loss from Sealord of $23m", he said.

"Unfortunately, owing to the loss in Sealord Group Limited there will be no dividend declared in relation to the 2013 financial year," he said.

"The impact of the consolidated group position loss is so big that we cannot responsibly pay a dividend. This highlights the ups and downs and continuing risks of a commodities business."

Dewes said they would continue to monitor Sealord's strategy.

They wanted to make Yuken "a one-off event".

AFL were talking with Sealord's other half owner, Japan's Nippon Suisan Kaisha Ltd, over how Sealord was operating.

AFL's chief executive Carl Carrington said their 2014 earnings could also be hit by the appreciation of the New Zealand dollar against the Australian.

He said Sealord expected a significant turnaround in 2014 and had approved a planned profit for the year of $19.5m, resulting in a profit contribution to AFL of $9.75m.

"While this will be a significant improvement from the last few years and will be the best result for Sealord in over five years, the following year is not without its challenges for Sealord," Carrington said.

The New Zealand dollar was an issue and sale prices were not rising enough to keep ahead of cost increases.

AFL said in its report on Sealord that Yuken had hindered the result for several years due to more than 30 per cent wage inflation every year for three years and the devaluation of the Argentinian currency.

They also criticised Sealord's poor performance in three pelagic and low-value fisheries, losses by a North American joint venture, and the high Kiwi dollar.

Undercurrent News said today that there had been a string of top-level exits from Sealord, with two chief financial officers, one chief operating officer, two aquaculture division heads and one head of human resources all coming and going.

Tocker had been replaced with Dorje Strang, who was the company's general manager for aquaculture, the site said.

Tocker told Undercurrent News he had a "good run of 20 years" with Sealord and left a "great company with great assets and quota access".

Aotearoa Fishing is 71.44 per cent owned by Te Ohu Kai Moana Trustee Ltd, or the Maori Fishing Trust, a pan-iwi body.

Northland's Ngapuhi iwi owns 12.63 per cent, Gisborne's Ngati Porou 6.3 per cent, Hawke's Bay's Ngati Kahungunu 5.4 per cent, Tainui 4.89 per cent and the South Island's Ngai Tahu 4.77 per cent.

Other iwi hold smaller shares.