Sanford first-half profit slides 26%, company sees recovery in demand

Wednesday 27th May 2009

Sanford, the fish exporter, posted a 26% slide in first-half profit as seafood prices declined amid grim international economic conditions. The company said it is optimistic a recovery is underway, meaning it won’t have to downsize its operations.

Profit sank to $26.1 million for the six months ended March 31, from $35.4 million a year earlier, which included a $20.6 million gain from the sale of assets. Revenue climbed 4.7% to $228.4 million as the company’s underlying business remained relatively healthy. Earnings before interest taxation depreciation and amortisation jumped 23% to $43.6 million.

The company is confident it has a well-balanced portfolio, and that its operations will continue “throughout the remainder of the year without the need for any downsizing,” it said in a statement. “Aquaculture sales and profits continued to improve following the significant gains in the second six months last year.”

Sanford was the biggest gainer on the NZX 50 index in 2008 as its shares climbed 27% on a surge in full-year earnings of 165%. The stock was unchanged at $5.80 on light volumes in today’s trading, and is up 6.3% in the year-to-date.

The company lifted its dividend to 13.1 cents per share from 12.2 cents last year.

The firm will “focus on managing our foreign exchange and debt levels to minimise risk and to safeguard the interests of all shareholders.”

The fish exporter had a foreign exchange gain of $6.5 million in the latest six months, from a $2.1 million loss last year. Since March 31, the dollar has gained 10% to 62.05 U.S. cents.

Sanford cut its unsecured bank loans 9% to $100 million in the six months ended March 31, while lifting its overdraft and borrowings at call to $26.4 million from $664,000.

Businesswire.co.nz

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