Writedowns depress Sanford's profit

The shares last traded at $5.65 and have increased 0.9 percent this year. Photo / Greg Bowker

Sanford, New Zealand's largest listed fishing group, reported an 18 per cent drop in first-half profit as it wrote down the value of its fleet and Christchurch mussel plant.

Profit fell to $9.6 million in the six months ended March 31, from $11.7 million a year earlier, the Auckland-based company said. Sales increased 0.1 per cent to $226 million, while earnings before interest, tax, depreciation and amortisation rose 18 per cent to $33.9 million.

The company took impairment charges totalling $6.8 million on its fishing fleet and the mussel-processing facility in Christchurch, which it plans to close.

Sanford operates across the fishing industry, including inshore and deepwater fishing and processing, farming salmon and mussels, and has three international tuna vessels.

The company has struggled against falling commodity prices for its skipjack tuna, blue mackerel and other oily fish, which in part has been offset by strong demand for its deepwater fish catches and stable prices for its greenshell mussels.

"We are moving to being a food company rather than just a fishing and marine farming company and this comes from being focused firmly on what our customers want," said chief executive Volker Kuntzsch.

In April the company said it was in consultations with 232 staff likely to lose their jobs at the Christchurch mussel-processing plant, which Sanford estimated would cost about $2 million. Recent weather patterns have affected natural spat (offspring) supply for several seasons to the point where it had to reconsider its mussel-processing capacity.

Sanford shares were unchanged yesterday at $4.77 and have fallen 0.6 per cent since the start of the year.

The board declared an interim dividend of 9c a share, payable on June 19, with a record date of June 12.