Sealord's annual profit falls 19 per cent

Sealord's net profit fell from $22.9 million to $18.5 million. Photo / File

Sealord's annual profit fell 19 per cent largely on an impairment charge of its British-based Sealord Caistor processing business, which was sold to shareholder Nippon Suisan Kaisha.

Net profit fell to $18.5 million in the year ended September 30 versus $22.9m a year earlier, according to holding company Kura's financial statements, lodged with the Companies Office.

Discontinued operations contributed a loss of $3.2m to the bottom line, including an impairment charge of $4.9m. Sealord's income tax expense was $6.4m versus $3.7m in the prior year.

Sealord's figures were better at an operating level with a 5.4 per cent gain in earnings to $28m as expenses continued to be curbed. The Nelson-based company, jointly owned by iwi fishing group Moana New Zealand and Japan's Nissui, paid dividends of $9.2m in 2017 versus $4m in the prior year.

Revenue from continuing operations at New Zealand's second-largest fishing company shrank to $325.8m from $337.3m in the prior year due to the slimmed down business, while the cost of sales from continuing operations was $233.6m versus $241m in the prior year. As a result, gross margins narrowed slightly to 28 per cent from 28.5 per cent in the prior year.

In recent years Sealord has gone through a period of exiting unprofitable businesses which it deemed "unsustainable."

The decision to sell its interests in Sealord Caistor is consistent with Sealord's focus on operational performance, the company said in a release.

"Going forward, the group now has a more sustainable margin structure," chief executive Steve Yung said in a statement.

Construction of Sealord's $70m purpose-built factory trawler – the first new design in New Zealand's deepwater fleet in over 20 years – remains on track for delivery in May 2018, it said. In September, Sealord said it was recruiting for 80 new positions for the trawler.

Rival fishing company Sanford reported an 8 percent increase in annual profit to $37.5m in the year to September 30 while sales rose 3.1 per cent to $477.9m.