Sanford profit rebounds in first half, but no dividend

Sanford has posted solid recovery in its first half earnings. Photo / Supplied

NZX-listed seafood company Sanford says it has made a solid recovery in the first half, with operating earnings increasing by 79.4 per cent, but said shareholders would have to wait until the end of the financial year before it could pay a dividend.

Sanford said its underlying earnings before interest and tax came to $19.2m on revenue of $270.9m, up 16 per cent on the same period in 2021.

Its net profit was $6.1m, 55.5 per cent behind last year's interim profit of $13.8m, which included a one-off gain of $13.4m from the sale of property.

The profit contribution from Sanford's wildcatch division was up 108.4 per cent, driven by a significant lift in global demand for whitefish.

Net debt came to $175.6m with around $90m in "headroom" with current banking facilities.

Chief executive Peter Reidie said the result was pleasing, although challenges continued on the domestic front.

"The uplift in EBIT and revenue is satisfying and we are pleased we have been in a good position to take advantage of the post-Covid recovery in many of our international markets.

"Now the challenges we face have shifted from demand to supply, with Covid-19 continuing to make its presence felt in New Zealand.

"This is impacting our operations, particularly in processing where reduced staff availability has impacted productivity and increased costs."

Sanford said its entire workforce was vaccinated against Covid-19, and that it was using rapid antigen testing at the majority of sites, including before entry to its vessels.

There were few current concerns about supply chain impacts, thanks in large part to its relationship with Kotahi - the Fonterra-Silver Fern Farms joint venture logistics company.

Reidie said the overall outlook was positive and that he expected strong demand improvements to continue.

"The limiting factors for us now are working our way through the domestic impacts of Covid-19 and addressing staff shortages in key areas such as mussel processing."

Sanford had decided not to pay an interim dividend but said it remained focused on returning to normalised dividend payments "as soon as it is financially prudent to do so".

The board would look at paying a "modest" final dividend payment at the end of this financial year.

-- Staff Reporter