Tuna proving elusive for Sanford

By IRENE CHAPPLE

Fishing company Sanford produced a $47 million 13-month profit yesterday on the back of foreign exchange gains.

The 27.6 per cent increase in the adjusted full-year profit came despite a drop in the company's earning before interest, tax and depreciation from $83.7 million to $50.4 million. Sales were down 6.6 per cent.

Margins in the second half were squeezed by lower than expected tuna catches. Managing director Eric Barratt said the result, released after the market closed, "was one we would have liked to have seen higher and we are going to work at it, but in the circumstances it was probably not too bad".

The company's big win was in foreign exchange hedging, where it netted $35.7 million compared with $6.8 million the previous year.

But the rise in the New Zealand dollar and a weak global market dampened the company's operational earnings and, said Barratt, "it's been hard to make money".

Greenshell mussel profits dropped and hoki catch was also reduced due to the lowering of the Government quota.

The low tuna catches were because "we couldn't find the fish", said Barratt.

The company's announcement said improved profitability next year would be based on its hedging contracts and improved returns, particularly from aquaculture.

It said the hedging contracts, which continue for another three years, could earn another $80.9 million.

Barratt said he believed the global market for fish was improving and he was hopeful shellfish profits also would improve over the coming year.

The company this week bought a 50m longline ship for $10 million. It will sail for the Ross Sea in the next few weeks to seek toothfish.

Forsyth Barr analyst John Cairns said the result reflected the difficult trading conditions and "is very much a function of its environment."

On November 5 the company announced a final dividend of 12cps and a one-off dividend of 20cps to commemorate its upcoming centenary.

Both dividends will be payable to shareholders on December 18.