Announcement

HALFYR: SAN: Interim Result Announcement 08:31a.m. 
SAN  
23/05/2019 08:30  
HALFYR  
PRICE SENSITIVE  
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  

Click here to view related attachments.