Sanford sees higher trading result as fuel prices, kiwi fall

Wednesday 28th January 2009

Sanford Ltd., whose stock was the biggest gainer on the NZX 50 Index last year, said trading results should improve this year, reflecting lower fuel costs and a weaker kiwi dollar.

"While there is still a reasonably degree of uncertainty in most of our markets, there are signs that the uncertainty at least is easing," managing director Eric Barratt told shareholders at their annual meeting today. "We would expect an improved trading result; this is based on the more favourable exchange rates and lower fuel prices," he said.

Sanford's profit soared 165% last year to NZ$53.4 million on a one-time gain from the sale of a Canadian investment, higher prices for some fish species and reduced costs, which helped it weather record-high fuel costs and a higher currency.

"Since the end of the financial year we have been faced with a grim economic and financial outlook in most of our export markets," Barratt said. Still, "in the last there has been some reduction in the level of uncertainty and the stronger and more substantial buyers are now starting to return to greater levels of buying."

Some are seeking price reductions to reflect changes in exchange rates, particularly for the yen, he said.

The New Zealand dollar has tumbled 43% against the Japanese currency in the past 12 months, to trade recently at 47.2 yen. The kiwi has weakened 32% against the U.S. dollar and was recently at 52.95 U.S. cents. The price of crude oil, a guide for marine fuel costs, has tumbled 54% in the past year to US$42.25 a barrel.

Shares of Sanford last traded on Jan. 27 at NZ$5.40 and have climbed almost 40% in the past 12 months.

By Jonathan Underhill

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