Focusing on value over volume helps boost Sanford profits 152 percent
New Zealand fishing group Sanford Ltd. has posted net profit after tax of NZD 34.7 million (USD 24.6 million, EUR 23 million) for the year ended 30 September 2016, an increase of 152 percent compared to the previous 12 months. It also delivered earnings before interest and taxes (EBIT) of NZD 57.7 million (USD 41 million, EUR 38.2 million), up 85.5 percent, with revenue rising NZD 13.2 million (USD 9.4 million, EUR 8.7 million) to NZD 463.5 million (USD 329 million, EUR 306.7 million), attributing the improved performance to the past year’s focus on switching from a volume to value strategy.
“The results show the company’s strategy of moving from a volume commodity exporter to a premium seafood company focused on value creation through utilizing resources in the best way, is working well,” said Volker Kuntzsch, CEO of Sanford.
“Sanford’s evolution is changing what we sell, how we sell it, the markets we’re building and who we’re selling to.
“We’re reducing our reliance on a purely frozen wholesale commodity exporter, to an increasingly consumer centric business selling our beautiful New Zealand seafood fresh to customers, with a particular focus on our domestic market Australia and Asia.
“This change also brings sustainability benefits across our business minimizing our use of energy resources to transport and freeze large volumes of fish,” he said.
In a first for the company, consumers will begin to see Sanford branded products for sale in the next year, said Kuntzsch.
He added that the appointments of a chief customer officer, general manager brand and consumer, domestic market director and general manager sustainability highlight where the primary strategic emphasis will be placed to create more value with New Zealand’s marine resources.
“A more pointed interaction with the users and consumers of our seafood and a segmentation of our product portfolio into high value and commodity brands will bring this strategy to life,” he said.
Operations revenue increased by 5.5 percent year-on-year against a sales volume reduction of approximately 11 percent, with the volume decline largely attributable to reduced catches of pelagic species – including mackerel and skipjack tuna – to align supply with demand and limit cold storage.
“Limiting the amount of lower value pelagic species in our portfolio, while targeting a higher volume of chilled fish sold to customers or directly to consumers resulted in a significant increase in value from prior year. Overall, value per kg of greenweight fish, a measure that combines the outcome of targeted operational activities with a sustainability focused approach, has improved by over 45 percent compared to last year,” said Kuntzsch.