Tassal Group announces best ever first-half results, significant growth in salmon growth and sales

Published on
February 18, 2019

Hobart, Tasmania, Australia-based salmon farming company Tassal Group has announced its best ever results for the first half of a financial year.

Tassal reported its salmon sales for the six months ending 31 December, 2018, rose 21.7 percent by volume to 20,578 tons, and increased 32.8 percent in value to AUD 285.4 million (USD 203.5 million, EUR 179.9 million). The company’s earnings before interest, tax, depreciation and amortization (EBITDA) hit AUD 64.3 million (USD 45.9 million, EUR 40.5 million) and its net profits after taxes reached AUD 31.7 million (USD 22.6 million, EUR 20 million), up 20.8 percent and 22.3 percent, respectively. Operating cashflow nearly doubled to AUD 79.7 million (USD 56.8 million, EUR 50.2 million).

The company reported favorable salmon market dynamics, with strong consumer demand outpacing supply growth. 

“Together with larger fish and an ability to further optimize sales mix, this has offset increased salmon cost of goods sold,” Tassal said in its 1H 2019 report.

Sales have grown both domestically and internationally, Tassal Managing Director and CEO Mark Ryan said in a press release. He cited statistics compiled by the Tasmanian Salmon Growers Association and the Australian Bureau of Statistics showing that Australia’s per capita consumption of salmon (excluding canned salmon) increased from 1.32 kilograms annually in 2006 to 2.57 kilograms in 2016.

“Salmon continues to gain a larger portion of the Australian dinner plate, as consumers want a healthier, sustainable source of nutrition,” Ryan said. “The consumer trends in Australia are also being seen overseas, with export market demand also increasing, specifically for our larger-sized fish that are strategically targeted to Asia-based customers.”

Its September 2018 acquisition of the Fortune Group for AUD 31.9 million (USD 22.9 million, EUR 19.6 million) has the company aligned to enhance its revenues through diversification, the company said in its report. 

“Investment in modernizing and expanding [Fortune Group’s] farming operations, like we previously did with our salmon operations, will propel our next wave of growth and deliver material earnings upside in the short- to medium-term,” Ryan said.

The company has continued to make investments with its increased cashflow. It has ordered a new well boat for delivery in September 2019, has initiated a roll-out of a newly developed centralized feeding center for all its salmon pens, and is “actively considering” the building of a multipurpose recirculating aquaculture system (RAS) facility to grow larger and more smolt.

Regarding two natural phenomenon Tassal is confronting, the company is rolling out seal-proof “sanctuary pens” with the goal of reducing breaches, and has landed on a strategy of moving larger salmon to cooler sites in order to fight higher water temperatures.

“We are very pleased with the operational and financial performance of the business over 1H19,” Ryan said. “The strategy we set several years ago continues to drive business performance, with our 1H19 results reflecting a steep change in salmon volumes  as planned, underpinned by further growth in domestic per capita salmon consumption and significant growth in our fish.”

Photo courtesy of Tassal Group

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