New Zealand King Salmon reports 81 percent growth in profits
New Zealand King Salmon has reported an 81 percent increase in net after-tax profit for the first half of the fiscal year, but says it is bracing itself for an unfavorable second period, when hot weather is likely to negatively affect profits.
The company achieved a record first-half profit result of just under NZD16 million (USD 11.6 million, EUR 9.5 million), an 81 percent improvement over the comparable six-month period up to December 2016. (Fiscal years in Australasia run from 1 July to 30 June).
New Zealand King Salmon Managing Director and CEO Grant Rosewarne attributed his firm's performance to “strong growth in sales volumes, we have also made significant gains in the average selling price of our salmon. This mainly reflects increased sales of Ōra King whole salmon, but also represents our focus on the right mix of product and customer.”
The company reported a 29 percent increase in sales for the same period with 4,392 tonnes (4,841 metric tons) of salmon sold and a 22 percent increase in average selling price.
However, firm chairman John Ryder stated that while favorable growing conditions during the 2017 financial year helped the firm meet increased demand for its product, “the situation has now become more challenging.”
“The extraordinarily hot summer has impacted the survival rates of our king salmon, and this will be a principal factor behind an anticipated reduction in profits for the second half,” Ryder said.
The company has taken measure to meet this challenge, Rosewarne said, but they have had only mixed success.
“Our aquaculture team has been actively preparing the farms in anticipation of the warmer summer months; however, this year, water temperatures have been well above average,” Rosewarne said. “Our recently commissioned higher-flow sites have lessened the impact of the sustained heat, although, like many other farmers on land and in the sea, we have had associated performance and survival challenges. As a result, growth in sales volumes will be impacted during the second half of the financial year and into FY2019,” he said. “We’ll report in more detail once the summer period is over as we did last year, including an update on our progress towards a long-term solution to combat the risk of increasing sea temperatures.”
New Zealand King Salmon has declared a fully imputed final dividend of NZD 0.02 per share to be paid on 23 March, 2018
“The company is in a strong financial position with a positive net cash position as at 31 December, 2017,” Rosewarne said.