New Zealand seafood company Sanford has reported Net Profit After Tax (NPAT) for the financial year ending 30th September of $41.7m, compared to its 2018 result of $42.3m. Sales revenue increased to $558m on a like-for-like basis, up 8% from $515 million in the prior year, despite sales volume decreasing by 5% to 115,000 tonnes.
Sanford CEO Volker Kuntzsch said that while the result did not meet original expectations, it was a good outcome following a difficult year and certainly confirms that Sanford has adopted the right strategy for challenging times.
‘Climate change is the number one risk we face as a business. We see the consequences of warmer waters and adverse weather conditions playing out in the oceans and on our bottom line. In this situation, it is important for Sanford to be doing the right thing on the water to ensure we fish sustainably, and also to be vigilant and agile so that we are best placed to manage these changes,’ he said.
‘Our strategy to mitigate this risk through investing in innovation across the business and bringing our customer focus to life at the same time is clearly bearing fruit. Achieving significant top line growth with reduced volumes strongly aligns with our strategic direction.’
Among the challenges faced by Sanford in 2019 year was the sad loss of crew member Steffan Stewart in a tragic accident on the deepwater vessel, the San Granit. Sanford removed the vessel from operations for three months to complete a further and even more highly detailed risk analysis of all factory equipment and processes, despite having already had extensive adjustments made to align San Granit to regulatory safety standards prior to its addition to Sanford’s fleet.
‘With safety such a major area of focus for us, we were pleased that our latest engagement survey shows a very high awareness of the focus on safety and health across the business, with the outcome of 85%, the highest score of the entire survey, well above the international benchmark,’ Volker Kuntzsch said.
‘We will not compromise on safety and we are glad our people see that and are actively taking part in the safety conversation within the business.’
San Granit’s three-month tie-up meant a reduction in catch volumes, as did the decision by Sanford to support an industry initiative to voluntarily forgo 20,000 tonnes of hoki quota on the West Coast as a precautionary sustainability measure. These volume reductions could only partially be compensated for through higher catches of species such as squid and product mix improvements on board the deepwater fleet.
The Precision Seafood Harvesting (PSH) fishing method has been approved by the Ministry for Primary Industries (MPI) for use in inshore and in deepwater fishing and has since been deployed across Sanford’s fleet. This New Zealand-developed fishing gear is a game changer in world fisheries, delivering a superior quality of product through its gentler method.
‘PSH is creating a strong level of interest globally. Our fishing crews and our customers are enjoying the improvement in quality and customers are already telling us they want ‘fish caught the PSH way,’ Volker Kuntzsch added.
In the face of algal blooms limiting harvests in the Marlborough Sounds, Sanford’s mussel business posted an encouraging result on the back of stronger volumes, sales channel focus and product diversification. The mussel powder operation was boosted with the launch of the Sea To Me nutraceutical brand. The company has confirmed its intention to make a substantial investment in a marine extracts facility in Blenheim in 2020.
Sanford’s salmon division delivered a very good result, due to stronger volumes and value realisation. This was partly driven through its Big Glory Bay brand which is now on offer on menus in high end restaurants in New Zealand and the US. Sanford has been granted a consent variation for its Stewart Island salmon farm which will allow it to farm up to 30% more fish over the next three years. The salmon business was challenged by an algal bloom causing higher mortalities and a management plan is now in place to deal with climate change related risks in Big Glory Bay.