Tassal building salmon hatchery, purchases land for expansion
In the wake of strong growth, Australian aquaculture firm Tassal announced that it is moving forward with two big capital projects as a part of its long-term investment strategy.
During its second-quarter earnings report, the company announced that it acquired a piece of property known as Exmoor Station for AUD 25 million (USD 16.9 million, EUR 15.2 million). The company’s CEO, Mark Ryan, said the new area will be used to expand on Tassal’s shrimp aquaculture.
“Exmoor Station, together with our existing prawn farms when all fully developed, should allow targeting prawn production of circa 20,000 [metric tons] per annum,” Ryan said in a statement.
The company also announced it is planning to invest in a multi-purpose recirculating aquaculture system (RAS) facility to provide larger smolt, potentially up to one kilogram, or more smolt, as lease requirements dictate. The company estimates the cost of that investment to be somewhere around AUD 46 million (USD 31.1 million, EUR 28.1 million), with a completion date of either 2021 or 2022. According to Tassal, land for the project has already been acquired, and the approval process is already underway.
In total, the company announced that it is planning AUD 156 million (USD 105.6 million, EUR 95.4 million) in capital expenditures in fiscal year 2020 in both its salmon and shrimp operations.
The announcement of the two projects and the capital expenditures comes as the company posted a record full-year result in financial year 2019, across “all operational and financial metrics.” That success is coupled with advances in the company’s salmon and shrimp aquaculture growth strategies, it said.
That success resulted in revenue growth of 15.7 percent, up to AUD 560.8 million (USD 379.8 million, EUR 342.9 million), and operating EBITDA was also up 12.6 percent to AUD 112.3 million (USD 76 million, EUR 68.7 million).
Operating cashflow also increased significantly, by 104.9 percent to AUD 89.9 million (USD 60.9 million, EUR 54.9 million).
According to Ryan, in FY2020 the company plans to ramp up shrimp production volumes following redevelopment and appropriate stocking of the company’s Mission Beach, Yamba, and Prosperpine farms. The company is targeting a production of 2,400 MT, compared to 453 MT in FY2019.
“We expect to continue growing revenues and operational earnings in FY2020, and are well placed to do so given the success of our salmon growth strategy and accelerated prawn growth strategy,” Ryan said.