Sanford Limited delivered record half-year earnings despite a 5.5% revenue dip, driven by robust salmon and wildcatch segments, while mussel farming faced headwinds. The company cut net debt by NZ$63 million and declared a steady 5.0 cps dividend.
- Record adjusted EBIT of NZ$65.0 million, up 20%
- Net profit after tax NZ$42.4 million, up 25%
- Revenue declined 5.5% to NZ$270.2 million
- Net debt reduced by NZ$63 million to NZ$102.1 million
- Interim dividend maintained at 5.0 cents per share
Profit Milestones Amid Revenue Pressure
Sanford Limited (NZX:SAN) has reported a record-breaking interim profit for the six months to 31 March 2026, despite a 5.5% decline in revenue to NZ$270.2 million. Adjusted earnings before interest and tax (EBIT) surged 20% to NZ$65.0 million, with net profit after tax (NPAT) up 25% to NZ$42.4 million, setting new half-year highs for the company.
The standout drivers behind these gains were the salmon and wildcatch divisions, which together offset softness in the mussel segment. While revenue dipped, gross margin improved markedly by nearly 6 percentage points to 33.7%, reflecting a favourable product mix and operational efficiencies.
Segment Performances Diverge
The salmon business saw revenue fall 17% to NZ$56.6 million, a consequence of lower sales volumes following an accelerated sales push in the prior period to mitigate US tariff risks. However, EBIT jumped 29% to NZ$39.6 million, bolstered by improved pricing, a better product mix, and an increased biomass valuation due to reduced processing volumes.
Wildcatch revenue rose 7% to NZ$153.7 million, with EBIT up 32% to NZ$31.7 million. This was driven by strong catch rates, particularly for squid, and higher prices across key species such as hoki and Antarctic toothfish. Despite a decline in scampi pricing and catch, the inshore business provided steady returns.
Conversely, the mussel division faced a challenging environment, with revenue down 27% to NZ$49.5 million and EBIT halving to NZ$7.7 million. Demand and pricing pressures led to increased frozen half-shell inventory, which management aims to reduce in the second half of the year. The company is investing in a new purpose-built 30-metre aluminium mussel farming vessel and expanding mussel farm infrastructure in the Western Firth of Thames, targeting a March 2027 harvest.
Cashflow and Balance Sheet Strengthening
Operating cashflow dropped sharply by 72% to NZ$13.7 million, primarily due to working capital increases and a higher income tax payment reflecting improved profitability in the prior year. Capital expenditure was tightly controlled at NZ$6.7 million, down 59%, focused on completing new vessels and farm infrastructure.
Sanford’s net debt fell by NZ$63 million to NZ$102.1 million, a 38% reduction year-on-year, driven by disciplined capital management and improved earnings. Interest expenses declined 39% to NZ$4.2 million, reflecting the lower debt burden and favourable hedging outcomes.
The board declared a fully imputed interim dividend of 5.0 cents per share, unchanged from the prior year, reflecting a cautious approach amid market uncertainties including geopolitical tensions and inflationary pressures.
Strategic Focus and Leadership Transition
Sanford’s management emphasises a low-risk, capital-efficient growth strategy, prioritising no-cost or low-cost expansion opportunities such as utilising existing water space and infrastructure for mussel farming. Asset rationalisation and upgrades, including new vessels for salmon and mussels, are expected to improve operational efficiency and position the company for future growth.
Notably, the company appointed Tony Carter, former CEO of Foodstuffs and Chair of Air NZ, to its board in February 2026, bringing valuable expertise in food and distribution. Meanwhile, Chair Sir Robert McLeod, after 11 years on the board, signalled his intention to retire during 2026 at a time suitable to Sanford.
While the record profits highlight Sanford’s operational resilience, the sharp drop in cashflow and ongoing challenges in the mussel segment underscore the need for close monitoring as the company navigates a complex global seafood market.
Bottom Line?
Sanford’s record profits mask underlying cashflow pressures and segment headwinds, making upcoming operational and market developments critical to sustaining growth.
Questions in the middle?
- Will Sanford’s mussel segment recover its profitability in the second half as inventory is worked down?
- How will global trade tensions and tariff environments affect Sanford’s export-driven salmon business?
- What impact will the board leadership transition have on strategic priorities and capital allocation?