New Zealand-based Sanford Limited reported that the company had a 14.2 percent increase in adjusted earnings before interest and tax (EBIT), earning an additional NZD 35.4 million (USD 24.5 million, EUR 20.9 million) for the first half of the fiscal year, ending 31 March.
The increased earnings put the company at a revenue of NZD 272.8 million (USD 189 million, EUR 161.3 million), surpassing the NZD 230.4 million (USD 159.7 million, EUR 136.2 million) in earnings for the same period last year. Europe and China both saw significant growth: sales in Europe increased 85.4 percent, and sales in China grew 78.6 percent.
Sanford’s first-half report attributed the increased earnings to a “continuing focus on fresh,” shifting production towards higher value fresh items rather than frozen products. Strong global squid prices and high demand for greenshell mussels also contributed, Sanford said.
Responsible fisheries management, and a strong reputation for running a sustainable fishery, are part of the company’s overall focus, said CEO Volker Kuntzsh.
“New Zealand’s fisheries management system and our intention to always fish sustainably naturally limits the amount of fish we can catch. As a result, our focus is firmly on generating greater value through innovation and branding and by leveraging our niche position within the global industry in conjunction with New Zealand’s reputation in sustainable fisheries management,” he said.
The increased earnings didn’t come without challenges. Cyclones, heavy rains, and warmer ocean temperatures impacted operations.
“That meant smaller vessels had to seek shelter from the weather on several occasions and our farmed salmon in Stewart Island’s Big Glory Bay also felt the effects of warmer waters during the summer,” Kuntzsh said.
The company’s King salmon and Stewart Island’s Big Glory Bay were hit by higher mortality rates thanks in part to the warmer water, which lowered fish appetites. Sanford also had to deal with the ongoing consequences of the Kaikoura earthquake in November 2016, which damaged their Havelock mussel processing site. According to Sanford, the company has reached a settlement agreement with the insurers with respect to the earthquake damage, and further remedial work will be taken in the second half of the year.
Even with the uncontrollable environmental setbacks, the company expects to continue to see increases in its mussel product as demand and prices trend higher.
“We are very pleased to see growing demand for Greenshell mussel powder from our recently acquired Enzaq plant in Blenheim,” said Chief Customer OFficeer Andre Gargiulo. “We are investing in greater production capacity there, with the aim of doubling output over the next few months. Our broader focus on innovation can only benefit us, as we continue to seek to extract more value from existing resources.”
Kuntzsch said looking towards the future, the company plans to continue to invest in developing markets and the company’s brand.
“We will not shy away from our ambition to become the best seafood company in the world,” he said. “That ambition is at the front of our minds as we shape our strategy for the next five years. Key pillars of that will be continuing to invest in our asset base as well as into innovation, brand development and the training and development of our most important asset - our people.”
