Record £72m income for Scottish Salmon Company
The Scottish Salmon Company has reported record revenues of £72 million for the first half of 2017, a 25 per cent increase of the same period last year, despite harvesting lower volumes.
Net earnings were £24.3m (H1 2016: £16.9m) after fair value adjustment of £11.4m (H1 2016: £17.4m).
SSC said growing demand for salmon, particularly of Scottish provenance, improved the price achieved and subsequently earnings have risen substantially year on year with EBIT/kg before fair value adjustment of £1.65, a massive increase on the 39p per kilo operating profit SSC made in the first half of 2016.
Harvest volumes were 11,617 tonnes, down from 13,123 tonnes in H1 2016. SSC said the lower volume was due to bringing harvests forward in H2 2016, reducing availability for 2017. It reiterated its annual harvest target of 25,000 tonnes for 2017.
Buoyant market
The company, which has its head office in Edinburgh, said its strong performance was supported by the buoyant market, increased mean weights of harvested stock and a continued focus on improving operational efficiency.
In a statement SSC, which is listed on the Oslo stock exchange, said the biological situation (factors including sea lice and disease risk) remains challenging throughout the industry but the company focused on biological improvements, introducing a number of proactive and reactive strategies. It said its ability to manage the situation had improved significantly compared to last year.
Value of provenance
The company said it continues to advance its export strategy, "leveraging the value of its provenance and the continued demand for high quality Scottish produce". During H1 2017, SSC entered new markets in the Far East and took actions to expand its presence in North America. Together with Label Rouge salmon, the Native Hebridean brand is expected to be a key driver of export growth. During the first six months of 2017, export sales accounted for 52 per cent of value (H1 2016: 42 per cent).
SSC said it continued its focus during H1 2017 on increasing capacity and improving operational efficiency. Consent was secured for an additional 2,000 tonnes at a site at Portree on the Isle of Skye with a number of other proposals for site development under way. The Portree site will be stocked in 2018 with first harvests anticipated in late 2019.
Hatchery business
Investment in infrastructure progressed throughout the period including the purchase of Kinlochmoidart hatchery business Sunbeam Aquaculture Ltd, a longstanding supplier.
SSC chief executive Craig Anderson said: “Demand for premium quality Scottish salmon across the globe has never been higher and we have maximised the opportunities this provides, evidenced by a record half year performance.
“Export sales have risen exponentially in key territories like Japan, where we have just exhibited at the Seafood Expo. The response to our products has been overwhelmingly positive, particularly our unique Native Hebridean Salmon which has such a strong provenance story.
“Our strategy for long-term sustainable growth is paying dividends with another site expansion consented in the period and a robust pipeline in place. Our programme of site development and securing long-term customers relationships at home and overseas, are the fundamentals which underpin this growth strategy and remain our key focus for the remainder of 2017.”
SSC employs more than 500 people, including around 230 among the Hebrides.
