Christopher Adams

The Business Herald’s markets and banking reporter.

Fire and court charges hurt Sanford profit

Fishing firm posts 7 per cent fall after allowing for fines and temporary loss of two of three tuna vessels.

Photo / Michael Craig
Photo / Michael Craig

Fishing firm Sanford posted an almost 7 per cent drop in full-year profit yesterday as one-off events in its Pacific tuna operations took a toll on earnings.

The Auckland-based company said profit for the 12 months to September 30 fell to $20.8 million from $22.3 million in the previous year.

Shares closed steady at $4.45 last night.

The company said earnings before interest, tax, depreciation and amortisation (ebitda) lifted 4 per cent to $51.2 million, while revenue fell 0.9 per cent to $459.9 million.

Sanford was convicted in a US court earlier this year on a number of charges relating to the management of onboard oil records on the tuna fishing vessel San Nikunau while it was in American Samoa.

It was also found guilty of discharging waste into American Samoa's Pago Pago Harbour from the ship without using an "oily water separator".

One of its chief engineers was also convicted on two oil book charges.

Managing director Eric Barratt said the firm and the engineer will be sentenced on January 11 and the company faced fines of up to US$3 million ($3.6 million).

Sanford's Pacific tuna operation suffered from two of its three tuna fishing vessels being taken out of action during the year, he said.

Barratt said the San Nikunau was detained by US authorities in Pago Pago for the first four months of the financial year, while another tuna vessel - the Ocean Breeze - was out of action for two months after a fire on the ship while it was in dry dock in Lyttelton.

"The lost fishing time effect of these events at a time of record high prices for skipjack tuna is estimated [at] $7 million to $9 million for the year and the effect of legal fees and provision for fines is approximately $5 million," Barratt said.

He said inshore profitability improved in Sanford's New Zealand seafood segment as a result of higher catches and improved pricing for pelagic mackerel species and skipjack tuna.

Catches and prices for species including snapper, trevally and red cod were up on the previous year, he said.

Barratt said deepwater operations continued to be the most significant contributor of earnings to Sanford.

"Our main freezer trawler, longline and scampi fleet performed ahead of expectations in most fisheries and the charter fleet had a slow start but met expectations at year end."

Barratt said the events of the past year had "neutralised" Sanford's expectations for improved earnings.

- NZ Herald

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