Sanford forecasts 46% drop in net profit due to Covid-19 impact

Sanford expects to see its net profit to fall sharply for the September year. Photo / Supplied

Fishing company Sanford said it expects its net profit to fall by 46 per cent in the year to September 30 due to the impact of Covid-19, but that its balance sheet remained strong.

The company expects its net profit to come in at $22.4 million, down from $41.7m, in the previous financial year, in part driven by a lower-than-expected Patagonian toothfish catch.

Total revenue was forecast to fall by 14 per cent to $468.8m.

Read More

• Volker Kuntzsch to step down as Sanford CEO - NZ Herald
• Reduced toothfish catch impacts Sanford first half - NZ Herald

Sanford's adjusted earnings before interest and tax (EBIT) was forecast at $38.3m, down 41 per cent.

The company's earnings reflect the ongoing impacts of the Covid-19 pandemic on Sanford's sales channels, primarily to food service, as already disclosed to the market early in September.

"This result is a continuation of the sales revenue trend which we advised the market of in September," it said.

However, the fourth-quarter profitability was further impacted by poorer-than-expected wildcatch performance in September, driven by a lower-than-expected Patagonian toothfish catch and a lower "fair value" of salmon stock with expected future sales pricing under pressure.

"The result this year is disappointing, and our markets continue to be challenging and difficult to predict because of the evolving Covid-19 situation," the company said.

"Despite this our cash collection remained satisfactory through the year and our balance sheet is strong," it said.

"We continue to assess and make changes to re-position the business to be more adaptable and match our costs to the new environment."

Sanford shares last traded at $5.01, down 33 cents or 6.2 per cent from Wednesday's close.