SANford Chart

[winner69]

How much is it costing them putting the 'mariners' in quarantine in Chch

[iceman]

How much is it costing them putting the 'mariners' in quarantine in Chch

They're not involved. That is Sealord, Independent and Maruha

[winner69]

They're not involved. That is Sealord, Independent and Maruha

Thanks for that

[Jaa]

Any thoughts on the long term impact of the Christchurch quarantine debacle Iceman?

To me it's definitely shining a spotlight on some lazy practices in the industry that have continued for a long time. Harvesting NZ fish quota with foreign crews on foreign boats isn't doing NZ much good socially, environmentally, economically and now you can add negative health affects.

Seems an easy win for Labour to bring back apprenticeships in partnership with industry and Maori training providers while at the same time requiring the fishing industry to use NZ flagged vessels and an increasing percentage of NZ crew. No NZ First to protect the industry any more.

[Scrunch]

Any thoughts on the long term impact of the Christchurch quarantine debacle Iceman?

To me it's definitely shining a spotlight on some lazy practices in the industry that have continued for a long time. Harvesting NZ fish quota with foreign crews on foreign boats isn't doing NZ much good socially, environmentally, economically and now you can add negative health affects.

Seems an easy win for Labour to bring back apprenticeships in partnership with industry and Maori training providers while at the same time requiring the fishing industry to use NZ flagged vessels and an increasing percentage of NZ crew. No NZ First to protect the industry any more.

So is this easy win going to decrease or increase expenses? My guess is that increase them and the reason foreign crew's are used is because they are cheaper.
Is it going to increase revenues - probably not. Foreign purchases are unlikely to want to pay more for fish so that a NZ crew is on the boat.

Sanford has just reported a net surplus representing 4.8% of revenue, so inclusive of the benefits of these non-ideal practices you note, they aren't creaming it with high margins. The current 5% margin could fall quite a lot further if the government were to impose significant additional costs via rules on requiring higher NZ crew percentages and restricting where the vessel is flagged.

[iceman]

Any thoughts on the long term impact of the Christchurch quarantine debacle Iceman?

To me it's definitely shining a spotlight on some lazy practices in the industry that have continued for a long time. Harvesting NZ fish quota with foreign crews on foreign boats isn't doing NZ much good socially, environmentally, economically and now you can add negative health affects.

Seems an easy win for Labour to bring back apprenticeships in partnership with industry and Maori training providers while at the same time requiring the fishing industry to use NZ flagged vessels and an increasing percentage of NZ crew. No NZ First to protect the industry any more.

I think it is very difficult to say if there will be a long term impact from this debacle, although it is quite possible that a more negative sentiment towards the practice of using foreign crew may develop, even within Government.
I do note that these vessels have historically been used to catch significant amounts of lower value species such as mackerel that Kiwi boats have not targeted to any large degree due to poor economics. But they also catch species like hoki and squid.
All of these vessels are NZ flagged, after a law change some years ago but obviously you will not get Kiwis on these boats when the likes of Sealords advertise for crew with an ability to speak Russian !! But because they are NZ flagged, NZ laws, including employment law, applies to them and that includes minimum wages. So the Russian fishermen are not "slave labour" by any stretch of the imagination.

It should be noted that Sanford has NZ crew on their own vessels (not sure if they still charter a Korean vessel with Korean crew) and Talley's always crew all of their vessels with NZ crew. Sealord has a couple of these Russians, Independent Fisheries 3 I think and Maruha also uses only foreign crew (like Independent). Sadly Sealord also has a significant part of the crew foreign, on their new and flash vessel Tokatu. This is due to the fact that it is near on impossible to get keen, reliable young Kiwis to work in the sector. They don't want to go away for many weekends and they don't want to be subjected to random drug tests.
People often say that is due to low earnings but I don't agree. An unqualified 18 yo hard worker can go out on the factory trawlers (5 weeks trips) and work for 6 months of the year starting at $40-50k. No food or accommodation costs for those 6 months. If they work hard, the companies will pay for them to go to various courses and I know of a boy here in Nelson that had his full Qualified Fishing Deckhand after 3 years and earning $70k p.a. for 6 months work. Another became a factory manager after 5 years on around $120k. So there are opportunities for people to do well in the industry but people are not available. There is a crewing crisis in the industry.

Sadly, until we change the attitudes and get young people interested in hard physical work again, foreign crewed vessels will always be part of the industry.

[percy]

Iceman,thanks for your excellent post.

[Ferg]

This seems to have slipped under the radar. Masfen buying into Sanford back in September.
https://www.nzx.com/announcements/359959

[Sideshow Bob]

https://www.nzx.com/announcements/363101

Annual Results Announcement


12/11/2020, 8:30 amFLLYR12 November 2020
Name of Listed Issuer: SANFORD LIMITED (SAN)
FINANCIAL RESULTS for the year ended 30 September 2020
Sanford’s Full Year Results Reflect Impact of Covid-19
Year to 30 September 2020 vs 2019

Harvest Volumes (000 GW tonne) 113 +7%*
Sales Volumes (000 GW tonne) 106 0%*
$m
Revenue 469 -14% (-11%*)
Gross Profit 82 -23%
Adjusted EBIT 38 -41%
Net Profit After Tax 22 -46%

Earnings per Share 24 cents
Dividend per Share 5 cents

*on a comparable basis i.e. excluding pelagics business from 2019 figures. Sold in March 2020.
New Zealand seafood company Sanford Limited (NZX:SAN) has reported total revenue of $468.8m for the financial year ending September 30, 2020, a 14% decrease on 2019 ($545.1m). The business sees this decrease as directly attributable to the Covid-19 pandemic and its impact on food service globally.
However, the company says it has learned from the challenges and is adjusting to pandemic conditions, making the business better prepared for the year ahead, and remains confident that its longer-term strategy is the right one.

Sanford’s Adjusted (underlying) Earnings Before Interest and Tax (Adjusted EBIT ) for the year to 30 September 2020 was $38.3m (versus $64.8m for the prior year), representing a 41% decrease. Reported Net Profit After Tax (NPAT) 2020 was $22.4m, compared to $41.7m for the previous year, a 46% decrease.
Sanford, like many seafood companies globally, has been primarily reliant on food service as a sales channel, an area which has been hit hard by the lockdowns resulting from the Covid-19 pandemic response. For example, the company saw sales into North America fall by 30% compared to last year.
Acting CEO Andre Gargiulo says recent changes to sales tactics in global markets, to facilitate more consumer facing sales, means Sanford has a path to increased profitability in 2021.
“While we acknowledge this is a disappointing result, we are confident that our strategy to get closer to our consumers and maximise the value of our products is the right one. We are adjusting to changing market conditions and are putting in place a plan to more flexibly respond to changing environments, while protecting profits through an appropriate cost structure.

“It is a tribute to the hard work of our people that we have continued to operate profitably in 2020 despite the substantial challenges. The business has learned a great deal and we continue to develop alternative product formats and build a stronger presence in channels that have proved more resilient.”
CFO Katherine Turner says the numbers reflect the challenge of rapidly adapting a business which works on long time horizons for supply, for example seeding mussels or putting salmon smolt in the water two years ahead of harvesting.

“Pleasingly, we harvested more fish and shellfish than last year (with the exception of toothfish), but because of Covid-19, more stock than usual has gone to inventory.
“The pandemic’s impact on food service also meant that high value products were less in demand, reducing our margins further and increasing our cost base.
“Despite the challenges, our balance sheet and liquidity remain robust, with a gearing ratio at 31% compared to 24% last year and we will continue to make careful choices as we manage our asset rejuvenation programme, balancing investment needs with cashflow realities.”

Board Chair Sir Robert McLeod says the board is currently making good progress in the process to recruit a new CEO, replacing Volker Kuntzsch, who left on September 18, 2020.

Due to uncertainty caused by the impact of Covid-19, the ongoing asset rejuvenation programme and wish to ensure prudent cash availability, the Board has taken the decision not to pay a final dividend in respect of the 2020 financial year.

For more information or to arrange interviews, please contact:
Fiona MacMillan
GM Corporate Communications, Sanford
fmacmillan@sanford.co.nz
+64 (0)21 513 522

[iceman]

Confirmed the pre-release last week. An absolute shocker. Interim divie of 5c (down from 9c) and already announcing NO final dividend (down from 14c). They have a lot of rebuilding and restructuring to do.