Sanford seafood company's profit likely to be halved

The seafood company predicted a 46 percent drop in profit.
The seafood company predicted a 46 percent drop in profit. Photo credit: Getty

Falling salmon prices, slow sales and poor catches are expected to almost halve Sanford's annual profit.

The seafood company predicted a net profit of $22.4 million for the year ended in September, a 46 percent decrease on 2019.

Revenue was expected to be down by about 14 percent on last year to $469m, because disruptions caused by COVID-19 had reduced demand.

"The result this year is disappointing, and our markets continue to be challenging and difficult to predict because of the evolving Covid-19 situation," the company said in a statement to the stock market.

In August, Sanford moved to close its Tauranga factory with the loss of 66 jobs, because of lower processing volumes.

The company said its fourth quarter performance was hindered by poor catches of Patagonian toothfish and lower prices for salmon, which would pressure future prices.

"Despite this, our cash collection remained satisfactory through the year and our balance sheet is strong," the company said.

"We continue to assess and make changes to reposition the business to be more adaptable and match our costs to the new environment."

In September, the company bought a majority stake in beauty products company Two Islands.

Sanford chief executive Volker Kuntzsch resigned in September, after seven years in the top job, as the company made changes to focus more on retail consumers.