Sheffield, England-headquartered aquaculture health, nutrition, and genetics company Benchmark achieved revenues of GBP 78.3 million (USD 99.1 million, EUR 88.7 million) in the first half of this year, representing a year-on-year increase of 3.4 percent. It attributed the improved performance to growth in its genetics, animal health, and knowledge services division, which more than offset lower revenues in advanced nutrition segment as a result of weakness in the global shrimp market.
Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of GBP 7.5 million (USD 9.5 million, EUR 8.5 million) was 23 percent ahead of H1 2018, which the company said reflected the contribution of higher value products, an increase in the value of biological assets as a result of growing sales and increasing capacity at a new land-based salmon egg facility in Norway, as well as ongoing cost control.
Adjusted EBITDA margin for the period grew to 10 percent (8 percent in H1 2018), while net debt at 31 March, 2019, was GBP 65.5 million (USD 82.9 million, EUR 74.2 million).
In its trading statement, Benchmark said that it delivered against strategic milestones set for the period, including further trials of its next generation sea lice treatment and establishing a supply chain for the roll-out of its disease resistant shrimp in Asia, where trials continue to show significant commercial potential.
"The company delivered a solid first-half performance which places us well to refinance our existing credit facilities. The increased flexibility will allow the company to operate more efficiently and support the roll-out of products which are showing large potential and encouraging levels of interest from our customers,” Benchmark CEO Malcolm Pye said. “The Nordic capital markets are globally recognized as the leading public markets for aquaculture, drawing a community of specialist investors and analysts which the proposed refinancing will allow us to access.”
As announced last month, the change of control at AquaChile, its genetics joint-venture (JV) partner, resulted in an opportunity for Benchmark to take control of a breeding genetics facility currently owned by the JV and to pursue an independent strategy. It is envisaged that Benchmark's original equity investment will be returned to Benchmark and that this will be reinvested in its genetics business in Chile in the coming years.
Looking ahead, the company said that conditions in its core markets are mixed with salmon benefitting from growing demand and stable prices, while in the shrimp and sea bass and sea bream markets, a temporary overstocking issue has resulted in depressed prices and a decrease in production levels among its customers. But it added that this volatility is not unusual in its markets.
It is also making “significant progress” in the implementation of a structural efficiencies program, and overall, it expects the group to deliver broadly in line with market expectations for the full year.
“We remain focused on delivering efficiencies which will further drive margins and allocate capital to our priority areas of growth,” Pye said.
