KEY POINTS:
Fishing company Sanford yesterday reported its March half-year net profit more than tripled to $35.3 million thanks to a $26.2 million one-off profit from the sale of assets.
The sale of shares in the Canadian company Fishery Products International (FPI) and an impairment charge of $5.6 million net of tax distorted the result. Last year's profit was boosted by $7.5 million from an asset sale.
The impairment charges came from the sale of two fishing vessels, the relinquishing of a lease on Auckland's waterfront, the reduction in value in Australian fish quota, and fall in the value of shares in Canada's High Liner Foods.
Chairman Eric Barratt said with some prospect of a declining New Zealand exchange rate, strong market prices, good catches and aquaculture production, the outlook for the second six months was positive. However, high fuel costs would pull back some of the gains.
Earnings before interest, tax, depreciation and amortisation rose to $35.5 million in the half year from $26.3 million a year ago.
Revenue rose 18.5 per cent to $218.1 million and earnings per share rose to 37.8c from 12.2c. An unchanged fully imputed dividend of 9c per share will be paid on June 18.
Barratt said the operational profitability of the business had been strong, with improved catches and prices offsetting the negative effects of higher exchange rates and fuel prices.
"With the NZ dollar moving from US70c at the beginning of October 2007 through to over US80c at the end of the period, we were fortunate to achieve an average rate of US77.2c over the period compared to US68.9c over the same period last year." Exchange losses for the period totalled $2.1 million, down from $7.3 million the previous period.
Strong cashflows in the first half of the year (including the proceeds from the sale of FPI) resulted in a $20 million reduction in debt and a further $20 million repayment was made last month.
Catches of skipjack tuna in New Zealand and the Pacific were well ahead of previous years and this, coupled with substantially improved market prices, lifted returns from these operations.
Inshore catches of other species were in line with previous years and deepwater catches were improved for most species.
Demand, sales volumes and prices of deepwater species such as orange roughy, smooth dory and scampi were ahead of last year. Toothfish catches in the Ross Sea were lower as increased ice coverage this year forced an early end to catching.
Aquaculture production was in line with expectations but sales volumes were restricted due to new processing and testing regimes which were implemented following a listeria incident in November.
This resulted in inventories of mussels being higher than intended at the end of March, however demand was strong and prices have strengthened considerably, the company said.
Returns from Australian activities had steadily improved over the period and there had been a significant improvement from Chinese operations with increased volumes of product shipped and improved prices in America, Europe and Australia.
Sanford shares were steady yesterday at $4.38.
They have risen from $3.68 in March.
- NZPA
