Fishing company Sanford sees improvement from Covid-19 pain

Thursday, 10 February 2022

Sanford is seeing a pick up in demand as the seafood trade recovers from the Covid-19 pandemic.

Fishing company Sanford is starting to see some improvement in sales volumes and prices in its first quarter as demand picks up following a slump during the Covid-19 pandemic.

New Zealand’s largest seafood company was left with excess stock and faced weak demand following the pandemic outbreak in 2020 as restaurants and cafes suddenly closed and cruise liners stopped operating.

While it believes it has seen the bottom of the trough, the company is warning that challenges remain with a tight labour market, high freight costs, and the potential for further disruption to local supply chains as an Omicron outbreak looms.

“Demand is recovering in many of our markets, but we are preparing for further disruption in local supply chains and for labour issues in a tight labour market,” chief executive Peter Reidie said in a statement to the NZX. “These challenges will likely be operational, where the last two years have been defined by suppressed demand.”

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Sanford's operations span wildcatch fishing and mussel and salmon farming.

Warmer ocean temperatures have affected Sanford’s salmon farm in Big Glory Bay in Stewart Island.

More than 70 per cent of all seafood produced globally is consumed outside the home, and the pandemic has hurt Sanford’s business in all its key markets as Covid-19 spread around the world. Its profit slumped 46 per cent in 2020 and 16 per cent in 2021. The company expects profitability to improve in 2022 and return to pre-Covid-19 levels in 2023.

In the first quarter of 2022, covering the three months to the end of December, sales volumes lifted 11 per cent compared with the same period a year earlier, the company said.

In the wildcatch division, a 12 per cent fall in sales volumes was offset by a 24 per cent increase in pricing.

Strong demand for greenshell mussels saw prices increase 12 per cent while volumes rose 30 per cent.

Salmon volumes jumped 47 per cent with the company selling its remaining frozen stock, and prices lifted 8 per cent.

Reidie warned that warmer than usual waters in the company’s Big Glory Bay salmon farm in January had caused some salmon deaths, although they were within the averages for the month over the previous three years.

“We are managing this carefully with lower stocking densities and additional aeration in all our salmon pens,” he said. “However, the period ahead from March to May is traditionally a critical one for oxygen levels and algae, so we will continue to monitor and manage carefully.”

Sanford is exploring options for its crayfish quota, which it fishes and manages through third parties, which may result in its sale, he said. It plans to make a decision before the April start of the quota year.

Shares in Sanford rose 2.2 per cent to $4.75 in mid-morning trading on the NZX on Thursday. The stock has shed 27 per cent over the past three years.