Seafood company Sanford says trading is a touch stronger but it's still being challenged by tough market conditions, driven by Covid-19 and supply chain issues.
Sanford said it would recover additional supply chain costs through price increases. Photo: Supplied / Sanford
Chief executive Peter Reidie said as a "heavily export focused business", Sanford was hit early by the effect of Covid-19 on global food service and supply chains.
"We are now seeing different parts of our business begin to recover from that at different speeds," he said.
The company was facing increased costs and delays shipping frozen products to key markets such as Asia and the United States.
Supply chain costs were up by $5 million on the previous corresponding period - which is a 17 percent increase on a cost per tonne basis.
Sanford said it would recover the costs through price increases.
"Clearly the price impacts volume. We're fortunate that we have a wonderful product that the world wants - New Zealand seafood is in demand so we're optimistic in terms of our ability to pass on the freight cost," Reidie said.
"Having said that, it does take some time, and that does need to be worked through with our customers and our consumers."
Mussel pricing also continued to be a key challenge, with the coronavirus impacting global demand.
But the popularity of mussels - which provided around 19 percent of year-to-date revenue - had not dwindled.
Sales volumes were in line with the previous corresponding period, but weak pricing meant that revenue for the ten months ending July was down 21 percent.
Full year harvest volumes may also be affected by bad weather at Golden Bay and Marlborough Sounds in July and the extent of the damage was still being assessed, Sanford said.
Wildcatch remained the largest part of Sanford's business, providing 57 percent of year-to-date revenue.
Overall catch volumes for the first ten months were consistent with the previous corresponding period, Sanford said.
One sector recovering well from Covid-19 disruptions was the salmon business.
"I would also like to emphasise that it has done well in terms of fresh export through the aircraft system that has been supported by the Government, and we wouldn't have been able to do that without that government subsidy, Reidie said.
"We do thank the government for that and encourage them to carry it on."