NZ King Salmon profits hit by lower fish survival
New Zealand King Salmon today announced higher revenues but lower profits for the 12 months ended June 30, with biomass, sales and EBITDA impacted by fish quality and survival due to challenging growing conditions.
Revenue rose by 8% to NZ$172.6 million (£90m), and statutory net profit after tax was $11.4m, down 30% on the previous year (FY18), which the company said was partly down due to fair value biomass adjustment.
Harvest volume was 7,931 tonnes, down 1% on FY18.
Challenging year
In a market announcement, chairman John Ryder said: “A challenging year has tested our resilience, and yet we have still achieved a robust result and revenue growth.
“We achieved our second-most profitable year, despite sustained high-water temperatures during summer impacting fish survival.
“We continue to focus on operational improvement to advance fish performance and survival and are forecasting FY20 capex expenditure of $20m to fund these enhancements and other infrastructure developments.”
Key strategies
Managing director Grant Rosewarne said the company was continuing to target premium brand markets. New Zealand accounted for nearly half its FY19 revenue, but the company saw strong growth overseas, with North America bringing in 33% of revenue and 74% of sales for the premium Ōra King brand.
Rosewarne said: “We are responding decisively to elevated mortality with three key strategies; firstly, we are introducing a new Single Year Class production model, as well as upwelling systems to bring cooler water to the surface, to counter expected warm sea temperatures.
“Secondly, we are awaiting ministerial approval to relocate low-flow farms to inshore high-flow sites and, finally, we have applied to establish NZ’s first open ocean finfish farm. Our application to farm 7km north of Cape Lambert in the Cook Strait is with Marlborough District Council and we are expecting a decision by early next year.”
