Announcement

HALFYR: SAN: Interim Result Announcement 08:31am 
SAN
23/05/2019 08:30
HALFYR
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REL: 0830 HRS Sanford Limited (NS)

HALFYR: SAN: Interim Result Announcement

23 May 2019

Name of Listed Issuer: SANFORD LIMITED (SAN)
INTERIM FINANCIAL RESULTS for the 6 months ended 31 March 2019

Sanford Reports Lift in Earnings per Kilogram, Despite Challenges, in 2019
Interim Result

New Zealand seafood company Sanford Limited (NZX: SAN) has today reported
Adjusted Earnings Before Interest and Tax (EBIT) of $32.6m for the six months
to 31 March 2019. This represents a decrease of 8% on the same period last
year ($35.4m). The company saw a Net Profit After Tax (NPAT) of $22.9m,
which is a 16% reduction on the same period last year ($27.3m). The prior
year included a one-off insurance settlement for earthquake damage to
Sanford's Havelock mussel processing plant of $9.9m, whereas the 2019 result
included a gain on sale of $4.1m for some of Sanford's pelagic quota.

Sanford has achieved a slight lift in its EBIT per greenweight kilogram from
$0.56 per kilogram in the first six months of 2018 to $0.57 per kilogram in
the same period for 2019.

Group CEO Volker Kuntzsch says the result is satisfactory, considering the
challenges Sanford faced during the period.

"The first half of the 2019 year was marked by the sad loss of crew member
Steffan Stewart on board our deepwater vessel San Granit. Following
Steffan's death, we undertook an extensive review of all factory equipment
and processes with a view to trying to identify further ways of mitigating
potential health and safety risks. The Granit remained in port for three
months, which impacted on our catches and subsequently on our financial
result."

The reduced catches resulted in a decrease in sales volume of 12%
year-on-year, with revenue flat on a comparable basis at $272m.

One key development in the first half of the 2019 financial year was the
divestment of the pelagic assets which Mr Kuntzsch says was in line with
Sanford's strategy to focus on areas where maximum value can be achieved.

"Our ability to improve returns on species like mackerel is limited and
depends on factors such as global commodity pricing where we have a
negligible influence. We are thankful to the teams who have given Sanford
great service in this part of the business over many years and we are pleased
that many of them have found work with Pelco, the Tauranga based purchaser of
our pelagic assets."

Sanford Chief Financial Officer, Katherine Turner says, the challenges of the
first half are reflected in the result.

"The sad loss of Steffan certainly had an impact, both on our result and on
Sanford as a family. Plus we have faced some ongoing climatic challenges
such as increased biofouling on our mussel lines in the Coromandel. However,
the result confirms that our push towards achieving maximum value for our
beautiful New Zealand seafood is the right one. Our mussel and salmon
business units are performing better and the focus on delivering more fresh
fish has helped to strengthen the results from our inshore fleet. On our
deepwater fishing vessels, we are increasing the proportion of high value
products we produce from species such as hoki and this has resulted in a
pleasing improvement of returns for that species."

The company has reported several highlights for the 2019 first half trading
period, including the opening of a beautifully refreshed Auckland Fish Market
in the increasingly fashionable and food conscious Wynyard Quarter.

Mr Kuntzsch says the Market opening was a great success.

"Sanford has been present in this area for many decades and now we are
delighted to be able to offer seafood lovers from Auckland and far beyond a
modern, dynamic and world class Fish Market. The opening was a significant
event with a number of high profile guests and the feedback from media and
from all our visitors has been extremely positive. As well as the eight
seafood-focused eateries in the Market, we have opened a rebranded Sanford &
Sons fishmonger, which sells a wide range of Sanford caught and farmed
seafood and highlights our sustainability story."

Sanford has also celebrated the launch of its wholly owned supplements brand
Sea to Me in the first half of 2019. With Greenshell mussel powder capsules
for natural inflammation management the launch represents Sanford's first
foray into online commerce and coincides with positive developments at the
company's mussel powder plant in Blenheim, which has already doubled in size
in recent months.

A further positive development in Sanford's aquaculture business has been the
granting of a consent variation allowing a higher nitrogen cap in the
company's salmon farming operations in Stewart Island. Mr Kuntzsch says "we
are grateful to everyone who took part in this process and particularly to
the Stewart Island and wider Southland communities who took the time to
understand the proposal. We believe these changes will bring significant
benefits to the area in a sustainable way."

Mr Kuntzsch says the outlook for the rest of the fishing and financial year
is, on balance, positive.

"Overall we feel that our result for the first half of 2019 has been
satisfactory, despite the setbacks. We are cautiously optimistic about the
second half of our financial year as our fishing volumes are encouraging and
our salmon business is developing well, but an algal bloom in the Marlborough
Sounds has limited the mussel harvest season for an extended period. We will
continue on our path towards maximum value, while putting sustainable fishing
and farming and the success and safety of our people front and centre."

For more information or to arrange interviews, please contact:
Fiona MacMillan
GM Corporate Communications
fmacmillan@sanford.co.nz
021 513 522

For investor relations queries, please contact:
Volker Kuntzsch
Chief Executive Officer
vkuntzsch@sanford.co.nz
End CA:00334902 For:SAN Type:HALFYR Time:2019-05-23 08:31:01

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