Sanford posted a 46 percent increase in net profit in the first half of its 2024 fiscal year as its salmon, mussel, and wild-caught segments all recorded strong performances.
The Auckland, New Zealand-based seafood company hit net profit after tax of NZD 16.2 million (USD 9.9 million, EUR 9.2 million) in the H1 2024, up from NZD 11.1 million (USD 6.7 million, EUR 9.2 million) in the same period of 2023. The company’s adjusted earnings before interest and taxes (EBIT) rose 45 percent in H1 2024 to NZD 38.5 million (USD 23.6 million, EUR 21.8 million) – the highest first-half total ever for the company – compared to the NZD 26.6 million (USD 16.3 million, EUR 15.1 million) it posted in H1 2023.
The increases came even as the company’s revenue remained flat for the six months ending 31 March 2024. The company’s revenue dropped to NZD 276 million (USD 169 million, EUR 156 million) from NZD 277.6 million (USD 170.5 million, EUR 157.2 million) in H1 2023.
Sanford Managing Director David Mair attributed the strong improvement in profit and earnings to the company’s success across multiple segments.
“Our improvement has been driven by a continuing strong performance from the salmon business; an improving mussel result; and a positive result for wild catch following the sale of the North Island inshore ACE and related assets in October 2023,” he said.
Sanford announced its agreement to sell the annual catch entitlement (ACE) for most of the quota of its North Island inshore species in May 2023. The agreement saw Sanford offload two of its inshore fishing vessels and “a selection of its processing equipment and refrigerated vehicles/trailers” in a move that it said simplified its operations and established a lower risk revenue stream.
By segment, the company's wild catch segment remained Sanford’s largest revenue generator for the company. The segment posted NZD 139.5 million (USD 85.7 million, EUR 79 million) in revenue, down 9 percent compared to the year-ago period – partially related to a 11 percent drop in catch volume to 25,400 gross-weight tons. However, its profit rose 6 percent to NZD 26.6 million (USD 16.3 million, EUR 15.1 million), the company said.
“Planned maintenance saw two vessels in dry dock for a total of 10 weeks, affecting hoki and orange roughy catch,” Sanford said. “In addition, reduced U.S. demand for New Zealand orange roughy is impacting export demand.”
The company’s second-largest segment by revenue and volume was its mussel sales. The company sold 14,700 gross-weight tons of mussels, generating NZD 64.8 million (USD 39.8 million, EUR 36.7 million) in revenue, up 16 percent year over year. The mussel segment’s profit contribution also jumped by 338 percent to NZD 9.2 million (USD 5.6 million, EUR 5.2 million).
“Strong pricing and demand have continued for Sanford’s Greenshell mussels, with a sales shift toward higher margin half shell product,” Sanford said.
Low seedingis slightly affecting volumes in 2024, but an investment in a mussel hatchery has helped offset the risks, the company said.
Sanford's smallest segment by sales was salmon, which posted an 18 percent increase in revenue to NZD 55 million (USD 33.8 million, EUR 31.1 million). The increase in revenue also came with an increase in profit contribution, with the salmon segment posting a profit contribution of NZD 23.3 million (USD 14.3 million, EUR 13.2 million), marking an increase of 32 percent.
“The salmon business continues to excel, with investment in oxygenation equipment and new netting enabling Sanford to keep mortalities at low levels and helping meet growing global demand for Sanford’s high-quality salmon,” the company said.
Sanford said it will continue to invest in new initiatives, including a new scampi vessel to be delivered in early 2025. The company is also developing a marine extraction business, but that segment is "not yet at desired performance and profit levels,” Sanford said.
Mair said the company is expecting strong results in H2 2024.
“The new [New Zealand] government is supportive of the seafood and fishing industries, which should assist our growth ambitions, as we look to expand our farms and increase our harvest, catch, and export of quality seafood to the world,” he said. “Following a healthy first half result, we expect a more moderate second half performance in line with capacity and available inventory. We remain on track to deliver another improved full-year performance in FY 2024.”
