SAN
20/11/2013 16:29
FLLYR
REL: 1629 HRS Sanford Limited
FLLYR: SAN: Sanford Limited - Annual Result
Name of Listed Issuer: SANFORD LIMITED
For Full Year Ended: 30 SEPTEMBER 2013
Audited: NZ$m (millions)
CONSOLIDATED INCOME STATEMENT
Revenue: $462.644m ($459.957m) (0.6%)
PROFIT BEFORE INCOME TAX: $29.160m ($28.731m) (1.5%)
Less tax $8.760m ($9.074m) (-3.46%)
PROFIT AFTER TAX BUT BEFORE MINORITY INTERESTS: $20.400m ($19.657m) (3.8%)
Minority Interest: Profit $0.039m (Profit $0.042m)
NET SURPLUS ATTRIBUTABLE TO EQUITY HOLDERS OF THE GROUP: $20.361m ($19.615m)
(3.8%)
EARNINGS PER SHARE: 21.7cps (21.0cps)
Final dividend: 14cps (14cps)
Record date: 27 November 2013
Payment date: 4 December 2013
Imputation tax credit on final dividend: 5.4444cps
Sanford Limited is pleased to present its annual result for the year ended 30
September 2013.
Overview and Highlights
Profit for the year totalled $20.4m, up from $19.7m last year, EBITDA reduced
by 5% from $50.1m to $47.4m with a number of sectors failing to perform to
expectations in the second half of the year.
Slow growth of Greenshell mussels in the Marlborough Sounds, difficult tuna
catching conditions in the Pacific and lower-than-expected jack mackerel
catches in Tauranga all impacted the second half results. The ongoing high
level of the New Zealand dollar continues to hamper growth in returns from
generally-improved markets for most species. Impairment charges of $4.2m
included an additional $2.8m in the second six months in respect to the
valuation of our Australian business.
Depreciation and amortisation for the year totalled $16.3m, slightly up on
the $15.8m of last year. Net interest costs were reduced from $10.2m to
$8.2m on lower funding costs. Net currency exchange rate gains increased
from $7.4m to $10.3m as a result of effective currency risk management
strategies.
Revenue for the year increased by 1% over the previous year.
Looking ahead we are reducing our reliance on foreign charter vessels by
cutting our fleet from four to three with immediate effect. Work continues
to convert the remaining vessels to being New Zealand-flagged by 1 October
2014.
Further development of mussel farming areas in Wilsons Bay has been
undertaken and volume forecasts are for improved results in the coming year.
Improved results from our salmon farming operation in Stewart Island were
achieved with a substantial increase in local and export fresh salmon
markets. We have now achieved the ability to supply fresh salmon year-round
which increases access to these markets. The range and destination of markets
we can now serve for fresh salmon has increased.
The significant upgrade programmes to the San Nikunau and the San Nanumea
were completed during the year and the three Pacific tuna vessels are
expected to be able to fish for substantially more days than the last two
years. If access arrangements can be improved, average catches on an
increased number of days will produce the right results for this operation.
While tuna prices have softened from their peaks, current prices should
provide an acceptable return.
Commercial trials and development of the revolutionary new Precision Seafood
Harvesting wild fish harvesting technology are underway on our vessels.Two
Sanford vessels have been involved in trials this year. Over the next 12
months the trials will step up to include one vessel using the technology
full time.
While receiving less public attention Sanford's second Primary Growth
Partnership project, SPATnz, a selective breeding programme for Greenshell
mussel spat, is also making excellent progress with the first spat expected
for commercial use in 2015.
We are seeing slowly improving results from our Australian operations as we
realign our business processes and integrate more of the business
transactions between our New Zealand operations and market activity in
Australia.
We usually preface our predictions about expected outcomes with a note of
caution about the environmental uncertainty we face when farming and fishing
in a wild ocean environment. In particular, we point out the variability in
pelagic species catches (skipjack tuna, jack and blue mackerel and squid) and
the farming of Greenshell mussels, which have been impacted by the same
issues over recent years in both Coromandel and Marlborough regions.
Market pricing and exchange rate fluctuations are two other factors that we
look to mitigate, through targeting products and markets that are less
influenced by commodity pricing changes.
Sanford's outlook for the coming year is positive assuming the environmental
factors referred to above remain at least neutral.
Next year we should be able to rely on almost full utilisation of our purse
seine fleet, we therefore expect increased returns from this operation.
If Greenshell mussel growth returns to forecasted average levels, and, with
market pricing at current levels, we would expect returns from our investment
to lift significantly.
Increased salmon sales in the domestic market, and improved export markets,
have already generated greater returns from farmed salmon.
Securing long term access rights for our Pacific tuna vessels with various
Pacific Island countries remains a key focus, and forthcoming negotiations
facilitated by the New Zealand Government are likely to produce a positive
outcome.
Our inshore and deepwater operations will produce improved returns based on
increased resource access to species such as hoki, orange roughy and ling.
The Company is well positioned for the future with an extensive quota and
marine farm asset portfolio that can generate profitable returns. There will
be challenges to come but the Company is well placed to deal with them.
The retirement of Sanford Managing Director, Mr Eric Barratt was announced to
Shareholders at the Annual Meeting on 30 January 2013. Mr Barratt will leave
the Company on 31 December 2013.
Mr Volker Kuntzsch will succeed Mr Eric Barratt as the new CEO. He will take
up his appointment in early December 2013.
End CA:00244072 For:SAN Type:FLLYR Time:2013-11-20 16:29:48