Record revenues for SSC but mortalities take toll
The Scottish Salmon Company has reported record revenues of £39 million for the third quarter of 2017, although profits were hit by mortalities and lower harvest mean weights.
SSC said it made £39m (Q3 2016: £25.2m) on harvested volumes of 6,781 tonnes (Q3 2016: 5,486 tonnes). The increased revenue was driven by higher harvesting volumes and higher prices compared to the same period last year 2016. But prices were constrained due to harvesting smaller sizes and accelerated harvesting as a result of biological issues experienced at the end of the quarter during the period of seasonal warmer temperatures.
Operating profit was £6,723,000 (Q3 2016: £1,401,000) and EBIT/kg before fair value adjustments was £0.70 (Q3 2016: £0.62).
Cost/kg was impacted by mortalities and lower harvest mean weights, as a result of accelerated harvesting, compared to the first half of the year. The company said mortalities were accounted for as they occurred, and said higher costs from mortalities continue into Q4 and may continue to affect costs into 2018.
Treatment trials encouraging
It said its focus remains on the biology of the salmon, with continued use of the hydrolicer and freshwater treatment trials showing encouraging results. Ongoing stocking of cleaner fish throughout all sites and further development of site specific health planning had contributed to improved management of these issues.
In its Q3 report, SSC added: "The development of the company's processing platform is the core element of the quality growth strategy. This has continued with the introduction of a new filleting facility in the south [at Cairndow, Loch Fyne]. In addition to improving overall operational efficiency and product utilisation, the new line will improve flexibility and strengthen consistent and valued service.
"Export sales accounted for 48 per cent of value in Q3 2017, compared to 42 per cent in Q3 2016, demonstrating the effective strategy of driving export growth."
Provenance and quality
The report continued: "The Label Rouge and Native Hebridean brand values are built on the core competencies of provenance and quality, recognised for their premium positioning."
SSC reiterated its target to harvest 25,000 tonnes in 2017 and gave harvest volume guidance of 26,500 tonnes in 2018.
The company's chief executive, Craig Anderson, said: "We remain committed to our long-term strategy to grow our business and to produce the finest Scottish salmon produced in a sustainable way. During the third quarter, we continued to develop our operations, investing in operational efficiency and capacity."
He added: "Demand for Scottish salmon as a premium food continues and we will capitalise on this through market development and ongoing brand development built on our core competencies and heritage as already showcased by our Label Rouge and Native Hebridean brands."
SSC has 45 farms, 11 freshwater sites and two processing plants, and employs around 500 people. It is a subsidiary of The Scottish Salmon Company PLC, which is listed on the Oslo Børs stock exchange.
