Huon Aquaculture profits down in the first half of 2020, but optimism remains for recovery

Slow production and multiple weather events resulted in the decline of Tasmania-based Huon Aquaculture Group Limited’s net profit after tax, which fell to AUD 22 million (USD 14.5 million, EUR 13.3 million) for the six months ending on 31 December. Comparatively, the firm earned AUD 26 million (USD 17.1 million, EUR 15.7 million) during the six months prior, according to its first-half fiscal year (FY) 2020 financial report.

Huon said it started 2020 with lower harvest weights as it is still recovering from a jellyfish event that occurred in late 2018/early 2019. It added that it has also had to deal with increased production costs due to the challenges in the last two years.

“Production costs have risen over the last two financial years as a direct outcome of the challenges experienced, and this has carried out through into FY 2020 with the 2018 year class,” Huon stated.

The lower sales volume, the company said, was also a result of a difficult export environment, which it credits to selling smaller fish due to the aforementioned challenges.

Despite those challenges, Huon stated it is seeing recovery, as the average weight of salmon harvested in the last six months of 2019 increased to 5.07 kilograms, compared to an average of 4.1 kilograms in the first six months.

Numbers corroborate that, with the company’s revenue totaling AUD 178.1 million (USD 117.5 million, EUR 108 million) during the second-half of 2019, registering a 31 percent increase compared with the first half.

However, Huon’s operating net profit fell to AUD 3.7 million (USD 2.44 million, EUR 2.24 million), due to additional interest expenses and depreciation charges, which was the result of an increase in capital expenditures over the last few years. The company added that because it underwent major infrastructure improvements in 2019, it is also operating under high debt levels.

Despite the challenges, Huon said it is still positive that it will be able to meet its harvest targets for 2020, and the company’s harvest jumped 48 percent to 13,300 metric tons (MT) in the first half of 2020.

The company added that it is still confident that it will hit its production forecast of 25,000 MT in FY 2020 and 30,000 in FY 2021, increasing to eventually reach 40,000 MT.  It also added that the 2019 year class is, to date, the “best ever” and that the fish are at the largest size they’ve ever been for this time of year.

“The benefits of the improved 19 year class won’t be realized until FY 2021, and the increase in working capital it has driven has resulted in high debt levels being maintained,” Huon stated.

Huon added that biomass has been rebuilt despite the issues in FY 2018 and 2019.

“We have record biomass in the water and are confident that the completion of our second major efficiency and expansion program will deliver a sustainable in reduction in cost beyond FY2020,” the company said.

The company added that it has acquired the world’s largest wellboat, the Huon Storm, which is expected to “boost farming efficiency and further improve the company’s environmental performance.”   


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