Sanford & King Salmon: How are NZX fishing stocks faring?

Highlights

• The fishing and aquaculture industry witnessed fluctuations, majorly propelled by export earnings.
• Sanford announced that the commercial catch limits had been raised, which can help gain better business.
• New Zealand King Salmon witnessed a challenging 1H22 amid small fish size and counterbalancing limits on the harvest.

New Zealand’s fisheries provide a significant source of food for cultural, recreational, and commercial purposes.

Operators in the Fishing and Aquaculture industry spot and farm fish, crustaceans, and molluscs in a range of locations. Fishing is done in seas, rivers and other natural water bodies, aquaculture involves breeding and farming fish and seafood.

Let’s have a look at how these 2 fishing stocks are faring.

Image source: © 2021 Kalkine Media, Data source- EODHD/Others

Sanford limited (NZX:SAN) 

Sanford is an inshore and deepwater fisheries managing company. It is involved in the farming, harvesting, processing and selling of seafood. Sanford was hit by the COVID-19 pandemic early due to its impact on the global food services and supply chain.

SAN’s biggest piece of business is Wildcatch, whose catch volumes stayed consistent on pcp while revenue stayed below pre-COVID-19 levels for the 10 months ended July 2021. Another business segment, Mussels, showed a 21% drop in revenue on pcp, while Salmon witnessed an increase in revenue.

DO READ: How is Sanford’s (NZX:SAN) seafood delivery progressing amid COVID-19?

How are NZX fishing stocks faring?

The Group announced in September that the commercial catch limit in the Snapper 8 fishery (SNA8) has been raised, with effect from 1 October 2021.

ALSO READ: Would rise in SNA8 catch limit benefit Sanford (NZX:SAN) business?

The increase also propelled a rise in SAN’s total quota holdings for the SNA8 fishery and thus, allowing fishers to fully utilise this strong and sustainable fishery.

On 3 November, at the time of writing, SAN was trading at $5.06, down 0.59%.

New Zealand King Salmon Investments Limited (NZX:NZK)

New Zealand King Salmon is the biggest aquaculture producer of the premium King salmon species. The Group announced its financial results for the 6 months ended 31 July 2021.

NZK experienced challenging six months but began its Prescient aquaculture model in September 2021. The Group’s premium brands are showing strength in developing customer relationships and support margin growth, while also focusing on diversification across groups and markets to develop resilience.

The Group has predicted to harvest volumes of more than 4K tonnes in the second half of 2022, providing the usual premium prices. NZK is yet to update market guidance in months ahead.

On 3 November, at the time of writing, NZK was trading flat at $1.45.

Bottom Line

The fishing and aquaculture industry is expected to widen its scope in the next 5 years with export demand likely to recover over the period once COVID-19 subsides.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)