High salmon prices drive up Scottish producer’s earnings
The Scottish Salmon Company PLC achieved a strong increase in its income in the first-quarter of 2017 despite a significantly lower harvest than in the corresponding period of last year.
Its revenue for the last quarter totaled GBP 35.1 million (USD 45.3 million, EUR 40.9 million), up from GBP 29.1 million (USD 37.5 million, EUR 33.9 million) in Q1 2016. This was based on a total harvested volume of 5,685 metric tons (MT), down from 6,741 MT a year previously.
Increased revenue has been driven by further development of the export market, increased contract prices with a focus on customer partnerships together with consistently higher market prices, the Edinburgh-based company said in its latest operational update. At the same time, its operational earnings before interest and taxes (EBIT) of GBP 1.67 (USD 2.15, EUR 1.95) per kg were the best in the company’s history.
However, industry-wide biological challenges remain a challenge and had an impact on costs in 2016 and in Q1 2017, it said.
Exports accounted for 47 percent of total revenues in the quarter, up from 43 percent in Q1 2016.
"The global salmon market remains strong and prices are forecast to remain firm. Demand at home and overseas for Scottish salmon as a premium food product continues. Our aim remains to capitalize on this with our continued drive on exports together with a focus on developing long-term customer partnerships. Our Native Hebridean development complements the increasing trend of food provenance which is core to our marketing drive for overseas sales,” said Craig Anderson, CEO at The Scottish Salmon Company.
During the last quarter, it received a positive decision notice for a site at Portree on the Isle of Skye with an additional 2,000 MT of consent. This brings operations in that location to over 4,000 MT capacity. Smolt release will commence in September 2018, with first harvests anticipated to start in late 2019.
"We remain firmly focused on our long term growth strategy and new site development is an integral part of this strategy. The development of the site at Portree demonstrates this and complements our existing Hebridean operations," said Anderson.
He also confirmed that a new hydrolicer had been commissioned to address biological challenges, and that an additional well boat was being brought in to increase operational efficiencies and flexibility.
The company expects to harvest around 25,000 MT of fish this year.