Australian salmon producer Huon Aquaculture Group Ltd. achieved revenues of AUD 170.5 million (USD 133.3 million, EUR 108.5 million) in the six months ending 31 December 2017, which represented an increase of 28 percent year-on-year.
The company’s strong performance was supported by good growing conditions, which delivered a record average fish weight of 5.29 kg, as well as improved fish diets and the initiative to increase the size of the smolt put in the sea.
Huon’s salmon harvest for the six months totaled 12,693 metric tons (MT), up 35 percent year-on-year. This was in line with the guidance it issued in August. Its operating earnings before interest, tax, depreciation and amortization (EBITDA) increased by 49 percent to AUD 39.2 million (USD 30.7 million, EUR 24.9 million).
With the demand for salmon from Australian consumers growing at around 10 percent per annum, the volume sold by Huon into the domestic market was maintained, while taking advantage of stable wholesale and retail pricing. At the same time, improvements in channel mix combined with continuing growth in demand during the half resulted in an overall increase in the average price received.
“The resilience of domestic salmon prices over the past six months is expected to continue through calendar 2018 due to lower than expected volumes. This is a direct outcome of some of the challenges experienced during the summer period and has resulted in us announcing an increase in prices in order to protect continuity of supply for the remainder of 2018,” said Peter Bender, managing director and CEO of Huon.
Overall, 29 percent of Huon’s production volumes or 3,710 MT went into the export channel, reflecting strong demand from Asia.
New supply agreements are expected to push contracted export sales above 65 percent.
“The development of a sustainable, long-term client base in Asia is dependent on strong relationships that have been carefully nurtured over time. These relationships open doors to opportunities that would not otherwise be available,” said Bender.
“As we expand the business I am confident that the agreements we are putting in place across Asia to lock in sales at premium price levels, will remove much of the uncertainty and volatility that is currently associated with our sales into export markets.”
Bender said the company expects the 2018 financial year harvest to be close to 24,000 MT and that the average price/HOG kg across all channels for the 12 months will be around AUD 13.75 (USD 10.75, EUR 8.75) to AUD 13.85 (USD 10.83, EUR 8.81), compared with AUD 13.43 (USD 10.50, EUR 8.54) in the first-half of the year.
Huon also highlighted that Macquarie Harbour continues to be an important growing region for its salmon and ocean trout. However, due to concerns about overstocking, the company said it will be reducing overall production levels in the region during 2018 and expects that total production volumes will continue to decrease in the harbor “until the area stabilizes and returns to more normal environmental conditions.”
Macquarie Harbour currently accounts for approximately 10 percent of Huon’s annual harvest.
With regard to an ongoing research program into the viability of farming yellowtail kingfish, in partnership with the NSW Department of Primary Industries, Huon said plans for the first harvest from pens in Providence Bay, off the coast at Port Stephens, have been delayed until late March following the escape of AUD 1 million (USD 782,050, EUR 636,100) of fish in a period of severe weather.
The cause of the loss was not due to the design or integrity of the fortress pens but were down to operational shortcomings which have since been addressed, it said.
