Sanford sees annual profit dip

Last updated 16:50 28/11/2012

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Listed fishing firm Sanford has reported a 6 per cent slip in full-year net profit to $20.8 million, partly due to one-off events that hit earnings in its tuna business.  

Revenue slipped slightly to $460m, but earnings before interest, tax, depreciation and amortisation increased 4 per cent year on year to $51.2m. 

Managing director Eric Barratt said two of the three vessels in its Pacific tuna operation had lost fishing time during a period of record high prices for skipjack tuna - which had cost it between $7m and $9m.  

Its San Nikunau vessel, which was now undergoing an upgrade, had been detained in Pago Pago in American Samoa for four months of the year, following allegations it dumped oil waste at sea without first treating it and then presented false oil record documents to authorities.  

It was subsequently found guilty of six of the seven related charges.  

Barratt said it would be sentenced on January 11, but its legal fees and provision for fines totalled about $5m. 

The company also lost two months' fishing time with its Ocean Breeze vessel, thanks to repairs to its shaft and after a fire caused significant damage while it was docked in Lyttelton. 

The company's inshore business improved its profitability, with higher catches and increased prices for pelagic mackerel and skipjack tuna. Catches and prices for snapper, trevally and cod were also up year on year, Barratt said. 

"Local and export markets for most inshore species have been firmer than they were in previous years although the exchange rate continues to be a challenge."

Sanford's deepwater operations were the biggest earner, with stable income across all species. Hoki remained the most valuable whitefish species in New Zealand, but other species such as hake and ling were gaining traction outside their more traditional markets.  

Sanford's aquaculture division had refocused during the year on species and operations with the most potential to increase profits.  

Its various South Island mussel farming operations performed to or above expectations, and market returns had been stable despite the high kiwi dollar.  

Sanford's salmon profits were hit by weak prices in major markets, thanks to increased production out of Chile and Norway.  

Barratt said the outlook for this financial year was positive, although continued vessel upgrades meant its Pacific tuna business would not reach potential returns.  
"Markets for species such as hoki and Greenshell mussels have the potential to improve over the year and species such as skipjack tuna and blue and jack mackerel will retain their strong levels."  
Shareholders will receive a final dividend of 14 cents per share. Sanford shares are currently trading down 1.1 per cent at $4.40.

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