Salmon farmer back in profit after £15.6m operating loss last year
Scottish Sea Farms had a tough 2023 but its results for the first half of 2024 have confirmed its board's optimistic outlook
Salmon producer Scottish Sea Farms made a group operating loss of £15.6 million last year – a £30.4m turnaround compared to a £14.8m operating profit in 2022 - its newly published annual report shows. The 2023 loss includes losses made its subsidiary, SSF Shetland Ltd, reported last week.
Group turnover in 2023 was £197m, a decrease of £66m compared to 2022, on a reduced harvest of 27,061 gutted weight tonnes (2022: 35,900 gwt). Profit margin was -15.8% (2022: +3%).
The group’s pre-tax loss was £31.2m, which was reduced to £23m post-tax due to an £8.2m tax rebate. In 2022 SSF made a post-tax profit of £4.7m.
Back in the black
Directors of the company, which is owned 50-50 by Norwegian heavyweights SalMar and Lerøy Seafood, said SSF experienced a challenging year, along with the rest of the Scottish sector, due to unique biological challenges, but expected a return to profit in 2024.
This has so far proved to be the case, with SalMar reporting that SSF made an operating profit of NOK 138m (£9.7m at today’s exchange rate) in Q1, and NOK 234m (£16.5m) in Q2, more than offsetting last year's loss.
The biological challenges experienced by SSF last year were mainly jellyfish and gill health, resulting in early harvest of small, expensive-to-produce fish, and increasing costs of mortality.
Investing in resources
“We have continued to invest in resources to support fish health and roll out of modernising and consolidating our marine farms, increasing our pen size and reducing the number of pens at each of these locations,” the directors reported.
“Our smolt input of 10 million were put to sea from our sites at Barcaldine, Girlsta, and Knock, delivering strong, healthy fish with a good cost base.”
The directors said staff recruitment and development continue to be of paramount importance, with the company maintaining its commitment to paying the Real Living Wage (currently £12 an hour outside London, compared to £11.44 for the statutory minimum for people over 21).
SSF paid £30.75m in wages and salaries, and social security and other pension costs in 2023, a slight reduction on the previous year’s total of £31m.
Separately, the highest paid director received £953,000, a 17.6% increase over 2022, when they were paid £810,000. The same director also received £35,000 in pension contributions (2022: Nil).
£160,000 to communities
SSF contributed £160,000 in donations to local communities last year and has now paid £1.86m to communities since 2011.
The company’s total energy consumption fell by 6.4% to 120.1 million kWh, and total SECR (Streamlined Energy and Carbon Reporting) emissions were reduced by 4.8% to 29,804 tonnes CO2 equivalent.
Along with initiatives such as a roll-out of LED lighting, efficient heaters, and more efficient pumps, motors, and feed blowers, SSF is collaborating with wellboat contractors to improve fuel consumption monitoring to target areas for improvement. The fish farmer also has a policy to reduce the number of pick-up trucks it operates and procure more efficient, lower emission vehicles.
