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Sanford Ltd said its second-half profit before tax was less than 50% of the first-half due to steady declines in market prices and a strong NZ dollar.
The fishing company today reported an after-tax profit of $39.1 million in the year to September 30, down 26.7% from $53.3m last year.
The underlying profit rose 21% to $40.1m. The company held its final dividend at 14c a share, payable on December 16.
"While it is pleasing to report a continued improvement in underlying earnings, the strong results recorded in the first half of the year were not able to be repeated in the second half of the year as markets reacted to the global financial crisis and the United States currency conversion rate continued to impact".
Commenting on the weaker second half, the company said of particular concern was the effect on profitability created by the large number of New Zealand producers and exporters of greenshell mussels reducing prices to maintain market share.
Annual revenue was little changed at $433.09m from $436.56m last year.
The acquisition of the Jones Group assets at the start of the financial year enabled the company to fully participate in the Bluff oyster fishery for the first time.
Towards the end of the year, the company purchased of a major package of mussel farms along with longlines and other associated farm equipment in the Marlborough Sounds.
"This secures us a significant increase in availability of crop to process through our Havelock plant, which will now be upgraded to a new automated cooking and opening process similar to that currently being installed at the North Island Mussel Processors Ltd plant in Tauranga," the company said.
One of the bright spots of the year was continuing strong demand and price for orange roughy.
Fishing for toothfish in the Ross Sea was disappointing, with increased numbers of vessels from other countries forcing fishing areas to be closed earlier, reducing our share of the catch.
Commenting on the outlook, the company said it was difficult to predict if prices in markets disrupted by the global economic crisis would recover to previous levels.
"Looking forward, we expect that there will be a return to more normal levels of demand and pricing but whether it occurs in the near or medium term is a question unanswered."
The coming year would be another challenge.
