Australian salmon farmer posts record profit despite challenging summer

Published on
August 16, 2018

Huon Aquaculture Group Ltd. has delivered a record operating net profit after tax of AUD 35.4 million (USD 25.6 million, EUR 22.6 million) for the year to 30 June, 2018, up 23 percent from AUD 28.8 million (USD 20.8 million, EUR 18.4 million) in the 2017 financial year.

The Australian salmon producer said the improved performance was driven by a record harvest tonnage and strong pricing underpinned by supply and demand market dynamics.

Huon harvested 22,968 metric tons (MT) of salmon in fiscal year 2018, an increase of 25 percent on the previous 12 months, while its revenue of AUD 317.9 million (USD 229.8 million, EUR 202.9 million) was 23 percent higher. Its earnings before interest, tax, depreciation and amortization (EBITDA) increased by 14 percent to AUD 71.8 million (USD 51.9 million, EUR 45.8 million). 

“Importantly, this record [operating profit] result was delivered under extremely challenging operational conditions in the second-half,” Huon said in a statement.

Like other salmon farmers in Australia and New Zealand, elevated water temperatures and related factors impacted Huon’s production during a long, hot summer. While a record average fish weight in the first-half was offset by poor fish growth in the second-half, the company said that its average harvest weights had “improved marginally.” 

“Huon Aquaculture’s strong financial performance in FY2018 is a testament to the foresight of the company and the resilience it has developed – a direct consequence of the decision made four years ago to invest heavily in the business though our Controlled Growth Strategy,” said Peter Bender, CEO and managing director of Huon.

“Macro trends point to the need for continued growth to meet robust demand. With this in mind, we continued to invest for the future in FY2018 with our construction of the Whale Point Salmon Nursery and new fortress pens at Storm Bay and will continue to do so in the current financial year. Huon is well place for continued sustainable growth through ongoing investment in infrastructure and expanded capacity,” Bender added. 

The company started fiscal year 2019 with a lower biomass than had been projected due to the difficult growing conditions in the second-half of fiscal year 2018. It has forecast a harvest volume of around 20,000 MT but expects stronger pricing to deliver continued growth in operating EBITDA. 

Beyond fiscal year 2019, Huon anticipates returning to production levels in line with the market’s long-term average growth of around 10 percent. 

This outcome, supported by market expectations that pricing will continue to be underpinned by the shortage of supply over demand, should deliver continued growth in operating EBITDA in fiscal year 2020, it said.

Contributing Editor reporting from London, UK

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