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Highlights

  • In FY24, SAN achieved a 5% YoY reduction in net debt, now at NZD 185.5 million.
  • December 2024 Situation and Outlook for Primary Industries (SOPI), inflation nearing target levels; interest rates declining, easing debt servicing burdens.
  • UAE trade agreement offers 98.5% tariff elimination on New Zealand exports, rising to 99% after three years.

Sanford Limited (NZX:SAN) is a New Zealand-based fishing and aquaculture company. The company stated that export channels have been simplified and consolidation of certain distribution networks has reduced overall costs.

Throughout the financial year 2024 (FY24), Sanford focused on lowering overhead expenses and channel simplification, resulting in significant cost savings. These measures have contributed to the reduction of net debt to NZD 185.5 million, a 5% YoY improvement. Improved financial performance and increased operational cash flows also contributed to the shift in net debt.

Global Economy Shows Resilience Amid Challenges

According to the December 2024 Situation and Outlook for Primary Industries (SOPI), the global economic landscape is improving steadily. Inflation is moving closer to target levels, and declining interest rates are easing the burden of debt servicing. Additionally, international shipping costs have decreased over the past four months, and while still relatively high, farm input costs have begun to fall.

The global economy has endured a series of significant disruptions over the past four years, including a global pandemic, geopolitical tensions, and extreme weather events. These challenges strained supply chains, triggered food and energy crises, and prompted governments to implement emergency measures to protect populations and economies.

Despite these hurdles, the International Monetary Fund (IMF) forecasts stable global economic growth of 3.2% for both 2024 and 2025, supported by ongoing disinflation efforts. Encouragingly, growth projections for the United States have been upgraded, offsetting downgrades for major European economies.

Record Growth Expected for New Zealand's Food and Fibre Export Sector

According to the December 2024 SOPI, the food and fibre export sector is projected to reach NZD 56.9 billion in revenue for the year ending 30 June 2025, with further growth anticipated, pushing revenue to a record NZD 58.3 billion in the year to 30 June 2026.

A key factor driving this growth is the UAE trade agreement, which was finalised in just over four months. The agreement offers an impressive 98.5% tariff elimination on New Zealand exports upon its enactment, with this rising to 99% after three years. This trade deal is expected to provide significant benefits to New Zealand’s export sector.

Forestry exports are projected to recover in the near future, with a 4% increase expected in the year ending 30 June 2025, bringing the total to NZD 6 billion. This recovery follows the disruptions and slow global demand that impacted the sector over the previous two years.

The food and fibre sector remains a cornerstone of New Zealand's export economy, accounting for 81.1% of the country’s goods exports in the year ending 30 June 2024. Over the past decade, food and fibre exports have grown at an average annual rate of 3.2%, significantly outperforming the 1.5% growth seen in other goods exports.

Share performance of SAN

SAN shares closed at NZD 0.71% higher at NZD 4.28 per share on 09 January 2025. Over the past one year, SAN’s share price has increased by nearly 3.90% and in three months, it has surged by 12.11%.

52-week high of SAN is AUD 4.40, recorded on 27 November 2024 and 52-week low is AUD 3.70, recorded on 3 October 2024.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is January 09, 2025. The reference data in this report has been partly sourced from EODHD/Others.