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Fall in foodservice demand hits Sandford results. New Zealand’s largest seafood business, Sanford Limited, reports that its 2021 interim results are consistent with its most recent update to the market on 17th March 2021.

Challenging conditions continued during the six months due to the impact of the Covid-19 pandemic on the demand for seafood and on international supply chains. Sanford reports net profit after tax (NPAT) of $16.2 million, which included a $13.3 million gain on sale for two non-core properties. This was 15% below the $19.0 million NPAT for HY20. Its revenue for the six months ended 31 March 2021 (HY21) decreased 5% to $233.5 million. Adjusted Earnings Before Interest and Tax (Adjusted EBIT) for HY21 was $10.7 million, 54% lower year-on-year than HY20 $23.2 million, a period that largely preceded the impact of Covid-19. Overall conditions during HY21 are similar to the Covid-impacted second half of FY20, which had Adjusted EBIT of $15.0 million, a similar year-on-year decrease of 53%. Sanford says its second half tends to be seasonally stronger and it expects the same in FY21.

Key highlights:

  • Impacts from Covid-19 continue. Some early positive signs as markets start to reopen and new markets gain traction, although supply chain challenges continue
  • Results consistent with recent market update
  • Wildcatch performance was comparable to HY20, salmon strong volume growth, mussels remain under pressure
  • Team engagement at all-time highs
  • Ready for reopening: positioned for foodservice reopening in key markets as vaccinations lessen Covid-19 impacts
  • Balance sheet remains strong and net debt reduced by $3m since September 2020

CEO Peter Reidie, who commenced the role in early April, says lockdowns and other necessary Covid responses taken worldwide have had wide-ranging effects.

“Covid-19 has had adverse effects on foodservice demand, prices, labour and supply chains, especially freight. However, we have been able to switch markets, processing plants and product formats to retain profitability. We continue to manage the Covid impact as best we can, whilst ensuring that we are better positioned for when foodservice markets reopen.”

On a divisional basis, performance became more differentiated during this period. Wildcatch and salmon, which were impacted earlier in the pandemic, began to show early signs of recovery, particularly in volume. However, prices for mussels, which held up in the six months to September 2020, came under substantial pressure during this period due to an excess of supply over demand. Wildcatch consistent: wildcatch profitability remains below pre-Covid levels with reduced global demand impacting price. It has started to stabilise with wildcatch profit contribution largely unchanged.