KEY POINTS:
Fish exporter Sanford warned of a disappointing first half result, after a high New Zealand dollar ate into profit and weaker United States markets dampened sales.
Revenue was down 2 per cent for the six months ended March 31, as disappointing sales in the second quarter reversed a 15 per cent rise in the first three months.
"While demand has been strong for many species in Europe, weaker markets in the United States have resulted in lower volume sales of orange roughy, greenshell mussels and toothfish in the first half this year compared to the same period last year," Sanford managing director Eric Barratt said.
Catches and aquaculture production levels had been satisfactory, at 6 per cent ahead of last year.
Earnings before interest, tax, depreciation and abnormals was expected to increase slightly for the six months ended March 31.
However, foreign exchange losses of at least $7 million, compared with similar-sized gains a year earlier, would result in lower normalised after-tax earnings.
"The strength of the New Zealand dollar is decimating earnings across all products and resulted in foreign exchange losses," Mr Barratt said.
Profit would be boosted by a one-off gain of over $6m on the sale of Sanford's Argentine investment.
Proposals to sell the major assets in its 15-per cent owned Fishery Products in Canada were under consideration. If concluded, the sales could result in a one-off gain of about $20m, Mr Barratt said.
The carrying value of the investment was $C7 ($8.51) per share, while recent sales of shares in the company were at $C15 per share.
Shares in Sanford closed at $4.96, having traded between $4.50 and $5.25 in the last 12 months.
Sanford will release its results on May 30.
- NZPA
