Sealord profit more than doubles 2016 profit to $22.9m

Sealord more than doubled annual profit as the country's second biggest fishing group reaped fatter margins from a larger catch attracting better prices. 

Net profit climbed to $22.9 million in the year ended September 30 from $8.9 million a year earlier, according to holding company Kura's financial statements, lodged with the Companies Office.

Sealord's 2015 profit was restated from $10.1 million to reflect a mistake in the acquisition accounts of Van Diemen Aquaculture, which lowered the group's share of profits from associates. 

Revenue rose 5.3% to $454.3 million, while gross margins widened to 24% from 21% in 2015. The bottom line was bolstered with $3 million of other income, while operating expenses included $1.4 million of restructuring costs. 

Nelson-based Sealord didn't immediately have anyone available for comment, though chief executive Steve Yung said in December the company "had a good year with better catch volumes, better pricing and tighter control of overheads and administrative expenses, all contributing to the improved result."

In recent years, Sealord has been reducing the size of its workforce and quitting unprofitable divisions in response to lower prices and a strong New Zealand dollar.

Wage bill falls
Its latest accounts show the firm's wage bill fell to $82.5 million from $85.8 million and that it sold its North Island mussel processing and marine farming interests in the financial year. 

The result mirrored that of NZX-listed rival Sanford, which also more than doubled annual profit, as a weaker currency and higher-value catch underpinned revenue gains.

Sanford had also gone through a period of exiting unprofitable businesses that it deemed "unsustainable" and plans to scale back the "commodity nature" of its portfolio with New Zealand's seafood industry holding "great potential for adding substantial value to the economy."  

Last month, Sealord shareholder Moana NZ, formerly Aotearoa Fisheries, said it would lift its dividend to its iwi owners after lifting its own profit on the larger contribution from Sealord. 

The fishing group, whose other shareholder is Japan's Nippon Suisan Kaisha, declared and paid dividends of $4 million in 2016, down from $10.5 million a year earlier. 

In August, Sealord said it would spend $70 million on a new deepwater vessel, its first purchase since 1996, which is scheduled to be ready by 2018. 

BusinessDesk.co.nz